Topic: Nintendo down for the count? Not even close.

[NewsBot]

Nintendo may be in second place in sales, but no one is making more money.

Pundits are quick to proclaim that Nintendo is on the ropes, that they'll pull out of the hardware market and focus on software like former rival Sega.  Nintendo denies the possibility, and a new report has been released that proves just that.

In a 600 page report released by DFC Intelligence entitled "Market Leaders in the Video Game and Interactive Entertainment Industry", they calculate the gross profit each of the video game powerhouses has made, and how much went into the bottom line.  While Nintendo has made close to half of what Sony has in revenue, Nintendo has pocketed more money by keeping careful tabs on the bottom line.

The report goes on to say that this attitude might have cost Nintendo, as the market has evolved and Nintendo has remained as focused as ever.  It's mentioned that the same fourteen-year-olds that Nintendo considers its core market are more interested in games like Grand Theft Auto...games parents wouldn't want those kids playing.

The question is left open ... what does Nintendo need to do in the next generation to compete?  Will Nintendo shift its focus and attempt to be the "it" console with the successor to GameCube, or will they remain focused on the family market?  The report acknowledges that Nintendo's focus has shifted slightly with games like Eternal Darkness and Metroid Prime and by making deals with companies like Namco, Capcom and Square/Enix.

Thanks to Forum member "nolimit19" for the tip!

[fiveironalex]

Nintendojo has an excellent editorial on the subject of "mature" video games: http://www.nintendojo.com/editorials/view_item.php?1045848551

[Djunknown]

I read that editorial and it has some good comments. "Mature" gaming is in the eye of the beholder.

At 20 years of age, I haven't put down my controller, chances are, I never will. The gaming industry has grown up with us; from a novelty to a force to be reckoned with.

What the Big N should do is not sell out to appeal to older gamers, but just divide the way it approaches its gamers. A seperate ad campaign for its older crowd and one for the younger demographic. The GBA SP is hinting at this sort of idea, will they follow through?

Nintendo is the last company that all they do is Games and Hardware. Whereas as if Sony were to just quit making games, it can fall back on their HDTV's, Sound systems, computers, etc. And if Microsoft called a quits, its still the world's largest PC software maker. If the Big N said bye-bye, that 's it. No more.  End. Finito. (Wonder how the card business would treat them.)

Simply put, it ain't over till  its over.

[Bildo, Billiam, BJ, Mr. B'Nak, Billz, TurboTef]

Thats good to hear! I'm no fanboy, but I still like to see Nintendo on top of things without having to worry too much about what the other two companies are up too. Its still unerving in a way, that where I work at, ppl still say that the GC is for the kiddies. I've given up trying to explain to them why they are and aren't, but they just chime in and say "Thats why Sony is better", sheesh, is that the only thing some ppl are interested in, is just the status quo!? Blame it on the videogame clerks at the game stores...............

[mouse_clicker]

It pisses me off every time someone uses the "Nintendo makes more money" ploy when they realize Nintendo's sales are dying. You wanna know WHY Nintendo makes more money in videogames than any other company? It has nothing to do with "family values" or lack thereof- it's the GAMEBOY! The Gameboy, now with the Wonderswan being dropped by Bandai, has almost literally NO competition. The GBA is the fastest selling console in history and I believe it's matched the PS2 although being out for a year less. Just about *everybody* has a Gameboy of some sort, whether it's the original, Color, or Advance. Developers would have to be crazy to ignore this GIGANTIC user base, so they develop a ton of games. Most of them suck, but Nintendo gets licensing fees on every single one. THAT'S how they make all their money. I bet Nintendo's profits from the Gamecube are a joke when compared to the profit from the GB/A. I'd also bet Sony makes a LOT more off of the PS2 than Nintendo's making off of the Gamecube, and soon MS will be making more off the XBox or it's predecessor. Get it through your thick skulls, people, that Nintendo's money does NOT come from the Gamecube. Just because they get a bunch of money off of the GBA doesn't mean they're gonna pour all that money back into a console that's making very little profit. If Nintendo intends to keep it's home console *alive*, it had better learn that 3rd-parties are what matters. Nintendo can continue making their top-notch 1st and 2nd party games, but they need to hunt down 3rd-aprties as if their success depended on it. If you look at any very popular home console, there's one major trend- IMMENSE numbers of 3rd parties. This holds true for the Atari, the NES, the SNES, the Genesis, the PSX, and now the PS2. All had incredible 3rd-party support. In comparison, the Saturn and N64, for example, did rather poorly and had very little 3rd-parties (and don't try to tell me Nintendo made more money in the N64 era than Sony- nearly all of that was from the GBC). Nintendo needs to diligently grab 3rd parties, preferrably 3rd parties with VERY big selling franchises. That's not to say Nintendo needs to drop their mantra of quality, they just shoudln't elt that mantra interfere with getting 3rd-parties (because licensing is really where all the money is made). Luckily they're attracting some big name Japanese 3rd parties (Namco, Sega, Capcom), but they need more western developers (Rockstar, EA, etc). I've heard rumors Nintendo has some sort of deal with EA, but I don't nkow how much truth there is to it.

Oh, and in terms of sales, I believe Nintendo's 3rd everywhere except for Japan, in both consoles and software.

[Mingesium]

Nintendo does not make most of their money on the GBA.

Here is net sales from Nintendo financial report (# in millions of Yen):
2002 (Mar 01 - Mar 02)
Console
Software - 63,858
Handheld
Software - 164,799

2001 (Mar 00 - Mar 01)
Console
Software - 129,392
Handheld
Software - 139,468

The n64 was about dead and no GameCube and consoles almost made just as much as handhelds. In the 2002 report, GBA launched in the summer and GameCube launched in Nov so sales should be higher. It wouldn't surprise me that Nintendos shows they made more money in console software than handheld software in their 2003 report.

[mouse_clicker]

Mingesium: Two things. First off, I didn't say the *GBA* in particular, but the Gameboy in general, which is true. And second, they DO make most of their money of their handhelds. Between March 200-2001, they made more money of their handhelds than they're dying console. And look at those figures a year later! Profits from consoles is almost halved and handhelds went UP- the fiscal year of March 2001-2002, nearly THREEE FOURTHS of their profits came from handhelds, and that year includes the release of both a new home console and a new handheld. Denying that just shows you're IGNORING the facts. I'm not saying Nintendo's going to die, just that they should get their act together. Handhelds are much more profitable for them and using the argument that Nintendo makes more money than it's competitors is just wrong. In terms of consoles, I'm sure Sony's profits dwarf Nintendo's.

[RickPowers]

mouse_clicker ... Nintendo makes more money on GameCube than Sony does on the PS2.  PERIOD.  This doesn't even take GameBoy into account at all.  The GameCube is extremely profitable for Nintendo, and that's always been their focus.  People keep bringing up that arguement because it's TRUE.

[)Dark-LInk(]

so does this means N isnt very worried about the GC not SELLING more then the xbox?

http://www.theinquirer.net/?article=7974

here it says N got 7 BILLION$ in cash is this true? or made up? cuz if it is N is much richers then i thought......

[VideoGamerX]

It is true. I'm not sure of the exact amount, but Nintendo does have billions of dollars. They're well to do to say the least. They've got a nice chunk of change to play with.

[Mingesium]

Quote
Originally posted by: mouse_clicker
Mingesium: Two things. First off, I didn't say the *GBA* in particular, but the Gameboy in general, which is true. And second, they DO make most of their money of their handhelds. Between March 200-2001, they made more money of their handhelds than they're dying console. And look at those figures a year later! Profits from consoles is almost halved and handhelds went UP- the fiscal year of March 2001-2002, nearly THREEE FOURTHS of their profits came from handhelds, and that year includes the release of both a new home console and a new handheld. Denying that just shows you're IGNORING the facts. I'm not saying Nintendo's going to die, just that they should get their act together. Handhelds are much more profitable for them and using the argument that Nintendo makes more money than it's competitors is just wrong. In terms of consoles, I'm sure Sony's profits dwarf Nintendo's.

If you read my comments, I said that Nintendo would probable show a higher profit in 2003 for consoles than handhelds. The fact that the n64 was at the end of its life and it was keeping up with the gameboy shows that Nintendo makes a lot of money on consoles. In 2002 report, the GameCube just came out and library of games was small so the profit from games would be much less than handhelds. Nintendo just release Super Mario Sunshine, Metroid Prime, and Zelda for this fiscal year. Nintendo's next financial report should show a huge increase in console software.

[nolimit19]

"mouse_clicker ... Nintendo makes more money on GameCube than Sony does on the PS2. PERIOD. This doesn't even take GameBoy into account at all. The GameCube is extremely profitable for Nintendo, and that's always been their focus. People keep bringing up that arguement because it's TRUE."

WORD??? well if u say so i believe u rick, but i certainly wouldnt have guessed that. that is amazing and if that is the case, wouldnt that mean sony has more of a chance of dropping out of the console race......

[jasongst]

Rick the only disagreement I have is that it WOULD be nice if all my friends had a Gamecube instead of a PS2. Community is a great part of playing videogames and you lose that if your friends have a different system. You need people to play with and against!

Jonathan, I agree with you on the marketing part. I am *really* glad to hear that Nintendo is making the most money, but if their userbase isn't growing then what will keep them in the game in years to come? I think Nintendo is doing a bangup job with the games and the hardware, but I, like you, am disappointed with their inability to attract as much 3rd party support. One of the many types of games I like are Sega's sports games and I was very disappointed to see that they would not be returning this year.

Another problem I see is online multiplayer: the Nintendo's support for it is a joke. Most serious online players are going to look to the XBox (and the PC of course) if they are smart. Nintendo can say what they want about it not being a viable moneymaker but really they are just afraid of doing something new. The truth is that online multiplayer (in the case of most games) is actually a pretty cheap thing to do, relatively speaking. MS has gone the pricey route with elaborate servers, etc., but even that has only incurred a small monthly fee. When is someone going to allow people to run independent PC-based servers for console games? It works for PC games and it will work for console games as well. That would reduce Nintendo's maintenance cost to almost nothing.

In short, Nintendo seems a distant third in being "future proof" with the Gamecube.

[RickPowers]

Quote
Rick the only disagreement I have is that it WOULD be nice if all my friends had a Gamecube instead of a PS2. Community is a great part of playing videogames and you lose that if your friends have a different system. You need people to play with and against!

Maybe it's just me, but I'd rather all my friends had different systems, so we got to try a little of EVERYTHING.    I had a cousin of mine recently tell me he wanted to get a PS2, because his friends had one, and he's always going over there to play with them.  He wanted to be able to have them come to his house.  So I suggested to him that he get a GameCube or Xbox instead.  "Why, they've already got PS2 games."  That's my point.  If you've got something that they DON'T have, they're more likely to want to come over to play it with you, than to simply borrow your game and stay home.  

He'd never looked at it like that.  Sure enough, he got a GameCube, and all his PS2-loving friends are now coming to his house to play Metroid Prime and Super Smash Bros. Melee.  

[mojorizin]

Honestly, I think N still has a shot at a larger market share with the GC and a running start going into the next war.  Hear me out.

The market today is vastly different than even 10 years ago.  Very few people had a Genesis AND a SNES, a NES and Sega Master, or a 2600/Coleco/Intellivision.  Nowadays, there are loads of people on this board alone that are multi-console gamers.  Income has gone up, but within a year of release the competition mandates the base price of systems to shrink.  The basic price of the consoles haven't changed much in 20 years.  I remember paying $179 for the ColecoVision in 1982 - paid less and got a hell of a lot more with GC 20 years later.   I had system death on the PS1 by early'99 with the same games rehashed over and over; 2 years before the next gens were rolling.  Sega had a handful of great games, but were circling the drain.  My N64 sat and waited for the next first party game.  Developers had gone as far as they could with the PS, and nothing there to fill the void.

Conversely, PS2 will eventually hit the wall well before its time to ship PS3s.  With teens having more disposable income, scores WILL buy another system in the next 18 months (hell, my 6 yr old nephew has GC and PS2).   I think most of you will agree developers are merely scratching the surface of what the 'Cube and XBox are capable of.  The key here is to be on the leading edge of that second wave.  Looking at a KILLER lineup from Holiday '02 to Holiday '03 (and Mario 128 hopefully nearby) Nintendo is in position to maximize the opportunity.  I look at the PS2 and Xbox future releases and yawn.  I look at GC releases and giggle like a schoolgirl.  

With a few smart purchases here and there, a handful of quality ports and a bit of important 3rd party support coupled with more aggressive marketing (as we are beginning to see) GC sales should get a boost as PS2 begins to peter out into '04.  IF (and with N, its the biggest if) the next console is ready to roll with a few killer apps when the whistle blows - and I'm not talking Luigi in a 4 hour game played on a cutesy purple box, they will have the much needed momentum (absent since, like, 1985) to compete.  We may have millions of gamers who will appreciate what we already know - some of those will actually stay with Nintendo.  This almost guarantees the 3rd parties will develop as well.  They'll never again touch Sony's sales, but they'll get a heck of a lot bigger piece of the pie.   The problem now is that they have been so far behind for so long, that there isn't anything to get excited about until after halftime.  Don't give up on your product - you don't get smaller, you get meaner.  The enemy got up earlier than you did - so what, you just gotta stay up later.  

[nolimit19]

rick can u confirm that the gamecube makes nintnedo more money for nintendo then the ps2 does for sony? do u have a link of some sort?

[RickPowers]

Quote
rick can u confirm that the gamecube makes nintnedo more money for nintendo then the ps2 does for sony? do u have a link of some sort?

The only link I can give you that isn't going to cost you $3000 is in that news story.  But yes, the proof is in the report.

[nolimit19]

thanx man