Topic: Nintendo Posts Loss for First Half of 2010

[NWR_DrewMG]

The numbers are painted red for Nintendo for the first time in seven years.

http://www.nintendoworldreport.com/news/24366

Nintendo posted a loss of 2.01 billion yen (approximately $2,470,000) for the April through September 2010 period, citing the strength of the yen as the primary factor.

Nintendo relies on foreign sales for more than 80 percent of its business, and thus as the value of the yen rises, the value of the overseas sales falls. The same period in 2009 resulted in a 69.49 billion profit for Nintendo. This is the first time in seven years that Nintendo has posted an interim net loss.

Slower sales have also contributed to the loss. In the first half of 2009, Nintendo sold 11.7 million DS units, however in 2010, that number fell to 6.69 million. Sales of the Wii fell from 5.75 million to 4.97 million. Software sales for Wii and DS fell a combined 37 percent from the same period a year ago.

Nintendo still expects to make a profit in the 2010 fiscal year, with a projected net profit of 90 billion yen.

[KnowsNothing]

Well, it's been a nice ride nintendo.  You will be missed.

[broodwars]

With how many Wiis Nintendo's sold in the past and the coming 3DS probably killing DS hardware sales, this was pretty inevitable.  Plus, outside of Mario Galaxy 2 and Sin & Punishment 2, I'm kind of struggling to think of software Nintendo sold in the first half of this year, at least on Wii.

[King of Twitch]

I'm starting to wonder if there will be any Wii games in 2011

Well, here's the answer.

Goodbye old friend  1889--2010

[Peachylala]

I'm starting to wonder if there will be any Wii games in 2011

Well, here's the answer.

Goodbye old friend 

This. Methinks Nintendo has started to not ignore the third party problem the Wii has and started work on WiiHD/3D/Too/Whatever it will be named. But this also means delays, and we all know what happened to Twilight Princess.
 
:T

[Toruresu]

Wow. First loss in 7 years is impressive.

[Peachylala]

Cue the "Nintendo is Doomed" whining in 3, 2, 1...

[BlackNMild2k1]

I was reading up on this a little earlier, and I don't really understand how it all works, but was it really a loss that Nintendo posted or was it a dip in profits compared to this quarter last year.

because my extremely limited understanding of the situation was that they just didn't make as much money as last year and that had to do with the fluctuations in the value of the Yen which were mostly accounted for in last quarters report.

[Toruresu]

I was reading up on this a little earlier, and I don't really understand how it all works, but was it really a loss that Nintendo posted or was it a dip in profits compared to this quarter last year.

because my extremely limited understanding of the situation was that they just didn't make as much money as last year and that had to do with the fluctuations in the value of the Yen which were mostly accounted for in last quarters report.

Well, fair question. I read it as actual loss, not a profit loss, but I may be wrong. You are correct though, if it is projected profit not attained, that is not loss, its just that the goals were not met.

[MegaByte]

It's a net loss, but it's only for the first half of the year -- they still expect a profit for the whole year, which doesn't end until March, and should get it with all of the big games they have stacked up.

[Toruresu]

It's a net loss, but it's only for the first half of the year -- they still expect a profit for the whole year, which doesn't end until March, and should get it with all of the big games they have stacked up.

My first comment still stands. Impressive in this economy.

[BlackNMild2k1]

It's a net loss, but it's only for the first half of the year -- they still expect a profit for the whole year, which doesn't end until March, and should get it with all of the big games they have stacked up.

So more expense than income which is probably also related to 3DS production/manufacture?

But, I was also just looking at the Q2 report in the sales thread: http://www.nintendoworldreport.com/forums/index.php?topic=18481.msg640993#msg640993
and damn Nintendo is in TROUBLE. I know this was mentioned in the news story, but it looks so much worse when you compare it to yearly averages.

DS hardware sales went from a 28million a year average over the last 4 years down to less than 7 million for the 1st half
DS software sales went from a 164million per year avg. over the last 4 years down to less than 55 million for the 1st half

Wii hardware sales went from a 22million per year avg over the last 3 years down to less than 5 million for the 1st half
Wii software sales went from a 172million per year avg over the last 3 years down to about 65 million for the 1st half

So Nintendo needs a miracle to make up the difference in the 3rd and/or 4th quarter on average, because sales are waaaaaay down this year.
I'm not sure what they can do to reverse this trend with 3DS not coming out till next year and Xbox and Sony both gaining traction in sales moving into the holiday season. Price drops don't really work in the long term, hardware is kinda saturated and 3DS is looming over the horizon. So what can Nintendo do to combat this huge drop in sales? what games do they have that are really gonna sell by the boat load and push hardware out the door too?

[MegaByte]

Most of the actual loss was just because of exchange rates and the money they have tied up overseas, and the lower sales couldn't make up for it.

[Kytim89]

It's a net loss, but it's only for the first half of the year -- they still expect a profit for the whole year, which doesn't end until March, and should get it with all of the big games they have stacked up.

So more expense than income which is probably also related to 3DS production/manufacture?

But, I was also just looking at the Q2 report in the sales thread: http://www.nintendoworldreport.com/forums/index.php?topic=18481.msg640993#msg640993
and damn Nintendo is in TROUBLE. I know this was mentioned in the news story, but it looks so much worse when you compare it to yearly averages.

DS hardware sales went from a 28million a year average over the last 4 years down to less than 7 million for the 1st half
DS software sales went from a 164million per year avg. over the last 4 years down to less than 55 million for the 1st half

Wii hardware sales went from a 22million per year avg over the last 3 years down to less than 5 million for the 1st half
Wii software sales went from a 172million per year avg over the last 3 years down to about 65 million for the 1st half

So Nintendo needs a miracle to make up the difference in the 3rd and/or 4th quarter on average, because sales are waaaaaay down this year.
I'm not sure what they can do to reverse this trend with 3DS not coming out till next year and Xbox and Sony both gaining traction in sales moving into the holiday season. Price drops don't really work in the long term, hardware is kinda saturated and 3DS is looming over the horizon. So what can Nintendo do to combat this huge drop in sales? what games do they have that are really gonna sell by the boat load and push hardware out the door too?

Nintendo will have to ride this one out and hope that this holiday season and the 3DS help recoop their loses.

[Nemo]

They probably spend roughly the same amount money year round. But the amount of money they make during Christmas season is probably a lot freaking higher than the rest of the year. More hardware sales and more software sales.

Also, those number comparisons are deceptive 172million Wii games per year vs 65 million in the last six months. That's really more like averaging 86 million every half year and going down to 65 million. And like I said, this "first half of the year" sample took place during the six months of the year that are FURTHEST from Christmas as possible.

[BlackNMild2k1]

I did say that it looks worse when you compare it to the yearly averages.

but looking at the whole picture like that makes you realize how slow sales have gotten and how much Nintendo is gonna have to rely on the 3rd Quarter(Holiday) sales to stay within the yearly averages that they have been working with.

I mean DS hardware is at 1/4th the yearly avg 1/2 way through the fiscal year; software is less than a 1/3rd.
Wii hardware is less than a 1/4th of the yearly avg 1/2 way through the fiscal year, but software isn't that bad being only a little less than 40% of the yearly avg total.

It's only natural for Wii to be winding down from it's record setting pace, and DS is counting down the days for it's retirement, but Nintendo has got to worried about all the money it's not making potentially going to Sony and/or MS, especially with Move & Kinect having just been launched and MS basically putting a blank check on the table to market it's "Wii-Killer" to the masses.

Maybe it would be a good time for them to start talking about DQX for Wii.

[Chozo Ghost]

Its just like the late Gamecube years all over again. It blows my mind that it was 7 years ago, but I still remember back then when Nintendo posted its loss which at that time was its first loss EVER, and that goes way back to when it was a card company in 1889 (if I'm not mistaken). So this marks its 1st loss in 7 years, but its only the 2nd loss the company has ever had. Which is incredible, but the gap between 2003 and 2010 is much less than the gap between 1889 and 2003, so hopefully this doesn't mark a trend.

[Guitar Smasher]

BNM:  I think you're severely underestimating the importance of the holiday season.  Remember, last Christmas the Wii was sold out!  If you took a snapshot of this time last year, I doubt it would be very different.  It wasn't until NSMBWii was released that the outlook became positive.  While I don't think DKCR will do the same this year, I expect sales to be adequate as to reach a net yearly profit.  And apparently so does Nintendo. I do however think they missed an opportunity when they pushed Zelda back to next year.

On the subject of DS, what was the last significant title released for the platform by Nintendo?  Sure 3DS has prevented sales since E3, but I believe Nintendo has sort of given up on the system for a short while now.  Sales of DS are less important now than getting 3DS sales next year.

I think it's pretty clear that the strength of the yen is mostly responsible for there being an actual net loss.  When most of your sales come from NA (correct me if I'm wrong), and retail prices are lowest there, combined with the US dollar trading very poorly against the yen, it would be a challenge to be profitable.

[ejamer]

First, I'm not trying to suggest that everything is rosy for Nintendo.  They need (and appear to be moving towards) some significant changes in the near future.  However, the report isn't as gloomy as some people are making it out to be.


Any comparison of annual numbers vs the first six months of 2010 should be thrown out.  Nintendo has enjoyed massive, record-setting holiday seasons for the past several years.  That might not happen this year... but there is no reasonable evidence to state otherwise.  Year-over-year numbers for the same period do show a notable drop though, and that is something to consider when 2010 has already seen a handful of big releases like Monster Hunter, Mario, Tatsunoku vs Capcom, and Metroid.


However, posting a loss now is hardly surprising if you consider that two platforms are likely to be retired in the next couple of years.  Nintendo must have costs associated with development, design, and production of the 3DS and the Wii successor; costs that will only be balanced out by future sales of those systems.  The only question is how much is actually being invested and whether their next consoles will be as popular as the current ones.


So even though it's interesting news, it's hardly something to get your Princess Peach panties in a bunch over.  Nobody bats an eye when Sony or Microsoft swallow huge losses as long as they call it an investment for future sales... all while Nintendo has milked this generation of gamers (and non-gamers) for ridiculous profits at the same time.

[BlackNMild2k1]

I don't think I'm underestimating the importance of the holiday season, I'm just surprised at how much this holiday season is is gonna have to carry the weight. I also have no doubts that they will be profitable (i don't see how they couldn't be given their hardware and software dominance).

"It wasn't until NSMBWii was released that the outlook became positive."

But that is sort of my point, sales look down this year and I haven't heard of anything from Nintendo that is likely to reverse the flow. DKCR looks good, but I doubt it will be the "must have" title of the holidays and unless they have some other ace up their sleeves, 4th Q 3DS is gonna have to come in to the rescue. That pretty much leaves the most important quarter of the year to the advertising mercy of Move & Kinect. And if the casual "buzz" around Kinect is anything near what MS would like us to believe it is, then Nintendo should be just a little worried..... especially in the US.

[NWR_insanolord]

Like MegaByte said, this is the fiscal year, which ends in March of next year, meaning in addition to the holiday season they'll have the 3DS launch to boost the numbers before it's over.

[Peachylala]

So even though it's interesting news, it's hardly something to get your Princess Peach panties in a bunch over.

Nintendo is a company and companies lose money. No big deal. Except for one thing: this is Nintendo, and whenever something like this is reported, Nintendo haters get their (insert female character here) panties wet because it means Nintendo is suffering. Which they are not. An example of a game company suffering is Sega during the Saturn days at the hand of Playstation, N64 and Burnie Stoler's massive retardism. That is suffering.

Wii slowing down in sales in not exactly suffering. As Mop said in another thread, Nintendo makes profits no matter what position they are in. N64 and GCN weren't huge sellers, but Nintendo still made money.

On another note, I bet Epic Games CEO is popping a bottle of wine right now at this news.

[Chozo Ghost]

Nintendo has made such ridiculous money this generation from both the Wii and the NDS that even with this loss they're still rolling in massive dough, and that dough could keep them afloat for a few more generations of failed systems if it came to that... but I think the next Nintendo consoles will be successful as well. Will they be as successful as the ones of this generation or will Nintendo's market share recede? Only time will tell, but either way the massive money they've made these last 5 years is going to make sure Nintendo won't go the way of Sega anytime soon.

[Peachylala]

Nintendo has made such ridiculous money this generation from both the Wii and the NDS that even with this loss they're still rolling in massive dough, and that dough could keep them afloat for a few more generations of failed systems if it came to that... but I think the next Nintendo consoles will be successful as well. Will they be as successful as the ones of this generation or will Nintendo's market share recede? Only time will tell, but either way the massive money they've made these last 5 years is going to make sure Nintendo won't go the way of Sega anytime soon.

Iwata and/or Miyamoto wouldn't let Nintendo become like Sega, EVER. Sega lost their **** because of their fucktarded intercompany policies during the Genesis and Saturn days (seriously, go to X-Cult and read the pages for Sonic X-Treme and the Genesis titles,). They were so damaged that the Dreamcast, while a great system, floundered because of that and the PS2 release.

[MegaByte]

Just FYI, Iwata clarified the loss -- he said their sales were still very much in the positive, and the loss was solely due to exchange rates.