Topic: Nintendo Increases Expected Losses for the 2011 Fiscal Year

[Patchkid15]

Nintendo will be losing significantly more money than expected.

http://www.nintendoworldreport.com/news/29150

Nintendo predicts a net loss of 65 billion yen during the fiscal year ending in March 2012, according to their recent financial briefing.

Originally Nintendo had only anticipated a loss of 20 billion yen. However, in the first nine months of this fiscal year, Nintendo has already experienced a loss of 48.4 billion yen; this increase led to the drastic raising of their net losses.

Net sales for the company were down 31.2% in the last nine months. Nintendo attributed this decline in sales to the decrease of Nintendo DS and Wii hardware being sold. The Nintendo 3DS's price cut also affected sales numbers.

Nintendo did see some bright spots in their past nine months, including three of their titles becoming million unit sellers. Super Mario 3D Land, The Legend of Zelda: Skyward Sword, and Mario Kart 7 led Nintendo in a strong holiday season.

[Luigi Dude]

http://www.youtube.com/watch?v=8YBrIrXHg-A

[Chozo Ghost]

The Wii didn't have to die as soon as it did. Oh well though, its too late to worry about that now.

[S-U-P-E-R]

6 years is actually a really good lifespan for two GameCubes taped together with some wagglin'.

Also, the low years for Nintendo are always the ones between system cycles, unless my memory is retarded.

[Plugabugz]

This happened because they started the generation so top heavy and then waned away the generation with nothing. As opposed to the DS which was full of content in the middle of its lifecycle and died away gracefully.

Who's fault is this?

[xcwarrior]

All Nintendo had to do was bring over some RPGs and release them throughout the 2011 year. It's their own fault. Not sure why this comes as a surprise. Hopefully they learned their lesson and will come out swinging in 2012.

[darkone008]

RPGs won't save Nintendo.

[ejamer]

Releasing a couple of critically-successful RPGs that appeal to core gamers wouldn't have saved Nintendo's financial statement, but it also wouldn't have hurt their reputation or bottom line.


Choosing to let the Wii die with no meaningful releases in North America for well over half the year?  Not exactly a strategy that does anything to improve their current situation, engender goodwill from gamers, or get people excited about the upcoming Wii U release.


But hey, Xenoblade is coming out in a few months so Nintendo fans should all be grateful right?  (It is an awesome game.)

[Morari]

The Wii didn't have to die as soon as it did. Oh well though, its too late to worry about that now.

I would disagree. It's been what, six years? That's far too long for a machine that was already horrendously outdated when it first hit the market. Even your so-called HD consoles lost their technical muster after two or three years. We're talking about six and seven year old technology here. It's laughable that games are still made for the things in general, not just the Wii.

[Ian Sane]

All is right with the world.  2011 for the Wii was an embarassment.  It went from being the big success story of this generation to being irrelevent almost overnight.  Turns out it was a fad afterall or at least Nintendo abandoning it made it look that way.

Nintendo should be negatively affected by what they did in 2011.  They hung Wii owners out to dry for really no reason at all and got burned for that.  That's good.  I'm tired of Nintendo jerking us around and still making a big profit.  They needed this and hopefully they'll learn from it.

[Vahne]

2011 was pretty bad, but expected. They're shifting attention towards the next generation, this sort of thing happens almost all the time with Nintendo. Besides, even with less games coming out in 2011, who here actually got most or all the good Wii games anyway? Before my Wii was stolen, I bought plenty of Wii games but still had plenty of games I still wanted to get.

[Adrock]

@Ian (I can't be bothered with quoting on my phone right now)

Motion controls lasted an entire console generation and is being carried over to the next. That doesn't sound like any fad i've ever seen. Nintendo supported the Wii with more titles than they had the last 2 generations when they had traditional controls.  Having a weak 5th year is nothing new for Nintendo. Seems more like Wii U is late than motion controls descending into irrelevance. I know you don't like motion controls and that's certainly your right but it's clearly not going anywhere. There's a place for it in gaming, right next to traditional controls. Nintendo thought of it as a replacement rather than an enhancement. Motion controls work exceptionally well for some games and not so much/at all for others. Wii U offers the best of both worlds from the outset. Looks like the successors to 360 and PS3 will as well.

[Kairon]

The Wii lasted longer than the GameCube, longer than the N64. Sales have slowed down, but this loss is hugely attributable to exchange rate problems: a couple of years ago Nintendo earned 110 yen for every US Dollar, now it's more like 75 yen. I can't help but view the Wii as a good move from Nintendo, and a great console for me on which I have a huge backlog of games to play.

[ejamer]

..., and a great console for me on which I have a huge backlog of games to play.

Hear, hear!


I think Nintendo made some mistakes (they always do) and NoA in particular chose to ignore a handful of games that I lusted over... but the Wii has still been a tremendous console. It's given me five years of great gaming so far, and many years to come given my current playing habits and sizable backlog. Wii was clearly the best console for me during the current generation - any frustration or disappointment now is just that I don't want the ride to end.

[Luigi Dude]

All is right with the world.  2011 for the Wii was an embarassment.  It went from being the big success story of this generation to being irrelevent almost overnight.  Turns out it was a fad afterall or at least Nintendo abandoning it made it look that way.

Nintendo should be negatively affected by what they did in 2011.  They hung Wii owners out to dry for really no reason at all and got burned for that.  That's good.  I'm tired of Nintendo jerking us around and still making a big profit.  They needed this and hopefully they'll learn from it.

And yet from April 1st - December 31st 2011, the Wii sold 8.96 million units.  Also during that period of time it had 10 Nintendo games that were million sellers.  Irrelevant dead systems don't put up numbers like these in only 9 months.


http://www.nintendo.co.jp/ir/pdf/2012/120127e.pdf

Mario Kart Wii - 4.91 million

New Super Mario Bros. Wii - 3.53 million

The Legend of Zelda: Skyward Sword - 3.42 million

Wii Sports - 2.40 million

Wii Sports Resort - 2.19 million

Wii Party - 1.91 million

Wii Fit Plus - 1.75 million

Kirby's Return to Dream Land - 1.21 million

Wii Play: Motion - 1.12 million

Super Mario Galaxy - 1.09 million


I suggest you learn what the word fad actually means.  Just because Wii sales are down from the previous year, doesn't mean it's a dead system when sales show it's still doing quite well.  Plus the Wii in it's worst year is still doing much better than the N64 and Gamecube did in their best years.  Hell, that's actually better than what the SNES did in some of it's better years as well.


Just because you don't like the Wii doesn't give you permission to make ignorant statements.  The actual facts show that the Wii is a normal product living a normal products lifecycle.  It was introduced, rose in sales, eventually peaked, and has had a gradual decline and now about to be replaced by its successor.


First fiscal year - 5.84 million


Second fiscal year - 18.61 million


Third fiscal year - 25.95 million


Forth fiscal year - 20.53 million


Fifth  fiscal year - 15.08 million


Sixth fiscal year - currently at 8.96 million, will probably be somewhere between 10-11 million by end of fiscal year in March.

[house3136]

 This is exactly why I don’t think Nintendo will wait until November to release Wii U. This is February 1^st; with no big sellers on the docket for Wii, people are already frustrated. So, four months until E3, then another four months of lost profits until the Wii U is released? SM3DL and MK7 have sold five million units each in less than three months, and that barely even dented Nintendo’s projected software loss figures.  This makes me think they will strongly reevaluate the Wii U launch timing.
 

[Mop it up]

I wonder how much of this is due to developing the Wii U...

[Kairon]

There's no doubt in my mind that a lot of the falloff for 1st party support for the Wii is due to a strong emphasis on Wii U r & d. The thing that makes Nintendo home console transition years like 2001 and 2006, and now 2012, so difficult is that third parties aren't there in sufficient numbers to make up for Nintendo's shift in development efforts. 2012 will prove additionally problematic because of foreign exchange rate problems and the slow start to the 3DS. These are long term challenges, and I can see Nintendo posting a loss next fiscal year in addition to this one due to these difficult transitions and general economic climate.

[Ceric]

What this story really says is that Nintendo's portfolio of products performed under expectations.

[Luigi Dude]

I wonder how much of this is due to developing the Wii U...

Probably a lot.  Microsoft and Sony spent billions just creating the 360 and PS3 and third parties spend hundreds of millions just creating HD engines and assests to use to make games for these systems.  Since the Wii U is Nintendo's first HD system, it's probably costing them a few billion to develop it and create all the new HD engines for all it's first party studio's to work with.

That would explain the big lose the best since the DS, Wii and 3DS hardware and software together sold better in 2011 then the Gameboy Advance and Gamecube ever sold together in their best years and yet Nintendo still made money those years.  Yeah the exchange rate and 3DS price cut f*cked them over some, but for a lost as big as they're taking this year, with sales of their systems and games still pretty good, shows there's something they're spending a sh!tload of money on that is so big nothing can offset the loss.  Considering how expensive we know HD development is, that makes all signs point to the Wii U development being the main reason for these losses.

[smallsharkbigbite]

Since the Wii U is Nintendo's first HD system, it's probably costing them a few billion to develop it and create all the new HD engines for all it's first party studio's to work with.

It probably is, but all those costs are an asset that Nintendo will expense over the life of the Wii U.  Doesn't affect the loss they have right now at all. 

There's no doubt in my mind that a lot of the falloff for 1st party support for the Wii is due to a strong emphasis on Wii U r & d.

Is Retro designing the Wii U? EAD?  Microsoft is rumored to pull the trigger close the Wii launch and they haven't had a drought.  I'd say Nintendo first parties are working on Wii U games, but based on previous history, the only available title at launch with be Super Mario Sunshine Wii U edition. 

The Wii lasted longer than the GameCube, longer than the N64. Sales have slowed down, but this loss is hugely attributable to exchange rate problems: a couple of years ago Nintendo earned 110 yen for every US Dollar, now it's more like 75 yen. I can't help but view the Wii as a good move from Nintendo, and a great console for me on which I have a huge backlog of games to play.

The Wii was great for Nintendo because it printed money for 4-5 years before tanking.  But sales rate exchange had little to do with the loss.  It's a convenient excuse.  If you read the financial report, they actually expected the rate to drop further than it did.  They had major drops in price because sales were off.  They expected to sale more and keep the price higher.  Unfortunately, you need to release games to keep people interested in a product. 

@Luigi Dude

Depends on your definition of a fad.  The excitement over the Wii is clearly gone as bargain bin (below cost) prices are what are moving inventory now.  At one point the Wii was selling 2:1 of PS3/Xbox360 combined.  Now it's selling in third place.  Some of that is due to saturation, but the Wii has only sold 95 million while the PS2 sold 150 million and was the only console selling at the end of its generation.  Ironically last gen and this gen approximately 200 million units were sold (blue ocean failed?).  Last gen it was 75% likely to be a PS2 and this gen it's 45% likely to be a Wii.  Still great for Nintendo coming from 3rd place, but I'm not excited about the Wii U and I don't know if I'll pick up a 3DS.  Seems like to me the definition of a fad.  Sold like hot cakes for a few years before grabbing Nintendo's usual market place at the bottom of the three consoles.  Because I'm sure this will come as a surprise to Nintendo management, but this console generation actually isn't over yet.   

[Kairon]

The Wii was great for Nintendo because it printed money for 4-5 years before tanking.  But sales rate exchange had little to do with the loss.  It's a convenient excuse.  If you read the financial report, they actually expected the rate to drop further than it did.  They had major drops in price because sales were off.  They expected to sale more and keep the price higher.  Unfortunately, you need to release games to keep people interested in a product.

Yes, you're very right, there are other significant factors at play, but I don't think we should downplay the powerful effect of the exchange rate, especially since almost 80% of Nintendo's sales are overseas. It's true that Nintendo was hoping to turn a profit by charging $80 more for 3DS hardware and simply performing better than they did with the DS and Wii this year, but taking an additional 53.7 billion yen loss primarily due to "re-evaluation of assets in foreign currencies", almost equivalent to their entire loss, has got to play a part in it too.

[Chozo Ghost]

It is actually a good thing for Nintendo fans that they are suffering this financial loss, because as Ian pointed out they deserve it for ignoring the hardcore gamers and not delivering the Rainfall games in a timely manner, and for overpricing the 3DS with an obscene $100 markup and so on and so forth. It is best that they are suffering this financial loss because its the only way they will learn. If they continued to rake in easy money from casual suckers then they would never learn anything, so for those of us who aren't casual suckers this is good news. Maybe now Nintendo will wake up and return to being the great company that they used to be.

Let's not forget that even in the darkest days of the Gamecube era Nintendo was still profitable. Even in those dark days Nintendo catered to its true fans. There was none of this casual focus only bullshit like there is now.

[Kairon]

Personally, the N64 era was an absolutely wonderful time for me, even though that console saw a very drastic drop in marketshare for Nintendo.

This period is very challenging for Nintendo because their new handheld is underperforming, meaning they don't have the cushion that the GBA gave the GC launch, and the DS gave the Wii launch.

Also, I think it's curious that Nintendo localized the weird chibi robo and custom robo titles for the gc, but aren't keen on doing the same with the rainfall titles for Wii.

[Chozo Ghost]

Also, I think it's curious that Nintendo localized the weird chibi robo and custom robo titles for the gc, but aren't keen on doing the same with the rainfall titles for Wii.

Well, Reggie wasn't in charge at the time. So that's probably the reason. I think he needs to go... it may only be a coincidence, but it seems like Nintendo was better back before he showed up. Something changed right around the time he arrived, and not for the better.