Nintendo Braces For First-Ever Annual Loss

 Pages 1 2 NEXT
 

Nintendo Braces For First-Ever Annual Loss

image

Nintendo is about to post its first full-year financial loss in 30 years.

It wasn't all that terribly long ago that Nintendo's dominance of the videogame market was absolute. Despite gimmicky motion controls and anemic hardware, the Wii ruled the console playground with an iron fist while the DS went more or less entirely unchallenged in the handheld market. But things started to slow down in 2009 and now Nintendo appears to be almost in full rout.

The company has forecast its first annual loss since it began reporting financials back in 1981 - in other words, for all intents and purposes its first full-year loss ever. Nintendo said yesterday that it expects to suffer a loss of 20 billion [$264 million] for the year ending March 2012; coincidentally, in July the company predicted full-year profits of the same amount. Sales for the fiscal year are now expected to come in at 790 billion [$10.4 billion], down from an earlier forecast of 900 billion [$11.9 billion]. Total sales over the previous fiscal year were 1.01 trillion [$13.2 billion].

Despite looking all but unstoppable during the heyday of the Wii, Nintendo is caught in a bit of a perfect storm these days. Falling prices on the Xbox 360 and PlayStation 3 have made the technological gap between them and the Wii harder to ignore, while the DS is being muscled out by increasingly-capable smartphones and the stereotypical "mom gamer" is spending more and more time horsing around with online offerings on Facebook.

The strength of the yen, which is currently riding a post-war high, has also taken a big bite out of Nintendo's profits, a problem compounded by signficantly weaker sales of the 3DS than were expected, which forced the company to drastically cut the price of the unit very shortly after launch.

Sources: The Guardian, Gamasutra

Permalink

Not surprising. The Nintendo Wii party (fad) is over, and they're now forced to play catch-up with their other two competitors.

Honestly, I think it might take some actual new blood on their part to pull through this; Mario, Metroid, Zelda and Pokemon may not cut it on their own anymore.

I've been theorizing for months now, that this Christmas will be a make-or-break season for Nintendo, and it's just the precursor for possible success/catastrophe next year.

If they fail to put up strong numbers this Christmas, we may finally get to see what happens when a giant is backed into a corner..

Well I guess 29 out of 30 ain't bad.

Oh, and Nintendo? I know it isn't really your fault, but one big reason I don't have a 3DS is because I haven't seen a demo station for it yet. When considering the purchase of a 3D device known to give some people headaches and for other people which the device's gimmick simply does not work, having a chance to try before I buy is pretty much mandatory.

Losing Megaman Legends 3 didn't help any.

The launch of the 3ds was pretty rocky, they pushed it out too soon at for too much money... although oddly enough if they had launched it sooner it also might have done better since by the time it came out the 3d crazy was pretty much over, its still neat but not that popular anymore.

It's a shame. The 3DS is a pretty neat piece of hardware, but the lack of a software library didn't help it at all. I imagine that if they waited until the majority of flagship titles were ready for release, then they would have made a lot more money. But as it stands now, the 3DS is at a great disadvantage compared to the PSV.

Given its lower price and upcoming titles, I'd say that its performance will start to pick up in 2012.

The 3DS is their biggest problem, really. Honestly, the DS didn't do super well because of the touch-screen. Very few (good games) actually forced you to use that. It did well because as a Nintendo handheld it had a butt-ton of third-party support and solid first-party games. Honestly are there even 20 3DS games out yet? It's gonna be a while before that fire starts, if it does at all.

Either way, they're still sitting on a fortune from the Wii's success, right? So this isn't a huge deal.

That's what they get for forgetting they actually need to make some GAMES if they want to sell the hardware. What, did they really think they'll be able to sell the Wii just with bowling and tennis, forever?

Sorry, but serves them right.

this is something i notice about Nintendo and it's not gonna bode well for their future. They tend to plan things really really well. Things tend to go along with these plans, but sometimes (only a very few times) they really really don't. And when they really really don't nintendo always acts in knee-jerk fashion and that ends up causing even more problems. example the 3DS, expected to do well then didn't. Solution; cut the price drastically 1(2,3?) months right after launch. result; alienated hardcore fan base. solution; free crap. Result; even less sales for the people who already had it and alienated people who didn't already have it. Overall Result; A new handheld platform which already seemed gimmicky and had a very small catalog and that wasn't going to bigger very quickly that was now even more stigmatized.

I hope Nintendo can weather this storm because they tend to have problems dealings with problems and that usually causes bigger problems.

Can I make a suggestion? FIRE REGGIE FILS-AIME!

NoA is actively screwing the American hardcore gamers who want titles on the Wii, there is absolutely no American advertising of the 3DS (and they're still trying to push other DS systems, conflicting the interest to sell more 3DS games) or any Wii games, and any games that might garner hardcore interest are either completely under-marketed or just never come here to the states in the first place.

There are good games on the Wii. Great games for the hardcore gamers. NoA (I can't speak for NoJ or NoE) just doesn't ADVERTISE them! I never knew about Wario Land Shake It (an AWESOME game, seriously, it was awesome) until someone I'm subscribed to on Youtube did a Let's Play of it! I didn't know about Lost in Shadow until the ZP review! There is no promotion of material in NoA! Someone clearly isn't doing their job!

As for the 3DS, it was released too early, but now the games are going to start coming in. Still, it didn't help that they over-priced it so much when there was nothing for it. The holidays are going to help, and the games for it are looking awesome (Paper Mario FTW) but the release was a fucking mess.

On a more positive note:

The WiiU does seem to be fixing some other long-standing issues. Better 3rd party support, actual online play, HD graphics, standardized controls but now with a touch-screen... the WiiU could fix a lot of issues.

Still, Nintendo needs to get their shit together. They still make great games. High quality games. FUN games. I'm having more fun with Return to Dreamland than anything else this year. However, there needs to be some serious re-organizing in the administration.

The 3DS was definitely released too early.

Now I'm just hoping they'll hurry up and announce that a slightly larger 3DS with a second analog pad and no region restrictions is coming next year, so I can start planning when to acquire one. >_>

Scars Unseen:
Well I guess 29 out of 30 ain't bad.

Oh, and Nintendo? I know it isn't really your fault, but one big reason I don't have a 3DS is because I haven't seen a demo station for it yet. When considering the purchase of a 3D device known to give some people headaches and for other people which the device's gimmick simply does not work, having a chance to try before I buy is pretty much mandatory.

Losing Megaman Legends 3 didn't help any.

Im pretty sure if you just went to a store and asked for a demo they'd be happy to show you how it works and let you see if you bleed from your eyes because of how immersive the 3D is.

OT: Hopefully this will serve as a warning to other companies not to release a game device WITH NO GAMES.
The only one really worth talking about is Zelda and thats a remake, sooo apparantly Nintendo cant just print money like they thought.

Mr. Omega:
Can I make a suggestion? FIRE REGGIE FILS-AIME!

NoA is actively screwing the American hardcore gamers who want titles on the Wii, there is absolutely no American advertising of the 3DS (and they're still trying to push other DS systems, conflicting the interest to sell more 3DS games) or any Wii games, and any games that might garner hardcore interest are either completely under-marketed or just never come here to the states in the first place.

There are good games on the Wii. Great games for the hardcore gamers. NoA (I can't speak for NoJ or NoE) just doesn't ADVERTISE them! I never knew about Wario Land Shake It (an AWESOME game, seriously, it was awesome) until someone I'm subscribed to on Youtube did a Let's Play of it! I didn't know about Lost in Shadow until the ZP review! There is no promotion of material in NoA! Someone clearly isn't doing their job!

As for the 3DS, it was released too early, but now the games are going to start coming in. Still, it didn't help that they over-priced it so much when there was nothing for it. The holidays are going to help, and the games for it are looking awesome (Paper Mario FTW) but the release was a fucking mess.

On a more positive note:

The WiiU does seem to be fixing some other long-standing issues. Better 3rd party support, actual online play, HD graphics, standardized controls but now with a touch-screen... the WiiU could fix a lot of issues.

Still, Nintendo needs to get their shit together. They still make great games. High quality games. FUN games. I'm having more fun with Return to Dreamland than anything else this year. However, there needs to be some serious re-organizing in the administration.

Yes, NoA seems to actively hate or grossly misunderstand the more dedicated members of their fanbase (Operation Rainfall being a prime example).

Sgt. Sykes:
That's what they get for forgetting they actually need to make some GAMES if they want to sell the hardware. What, did they really think they'll be able to sell the Wii just with bowling and tennis, forever?

Just bowling and tennis, you say?

Ilikemilkshake:

Im pretty sure if you just went to a store and asked for a demo they'd be happy to show you how it works and let you see if you bleed from your eyes because of how immersive the 3D is.

OT: Hopefully this will serve as a warning to other companies not to release a game device WITH NO GAMES.
The only one really worth talking about is Zelda and thats a remake, sooo apparantly Nintendo cant just print money like they thought.

This is further shown by the Wii's christmas lineup; Or lack thereof. What do we have? Just Dance 3? A bad Call of Duty port? (seems at this point "Availbale for all major platforms" is a byword for "Comericalised shite" since it seems to only be movie tine ins or cheap cash-ins that bother anymore since the process essentially drains a ton of resources from actually making the game decent into porting it to different platforms)

There is of course the obligatory Zelda game but im joining the masses of people who are kind of sick of nintendo pulling the same shit decade after decade. Since there have stopped being MASSIVE leaps forward generation to generation just re-making the same game over and over starts to become pretty noticeable.

"The strength of the yen, which is currently riding a post-war high"

Interesting- just which war are we talking about, exactly?

Sorry Nintendo. I would have bought a 3DS if I had the money...

Scrumpmonkey:
There is of course the obligatory Zelda game but im joining the masses of people who are kind of sick of nintendo pulling the same shit decade after decade. Since there have stopped being MASSIVE leaps forward generation to generation just re-making the same game over and over starts to become pretty noticeable.

Sounds like you should read Edge's review before speaking out if ignorance.

"As for those puzzles? How's this for a statement of intent: not a single torch-lighting number, and only one push-the-box-on-the-button incident. How does it have the nerve to call itself a celebration of 25 years of Zelda? Blame Link's unusual toys. A flying beetle pulls players up into the rafters as digging claws bury deep into foundations. Add other tools that blow, yank, glide and drag, and designers have a juicy verb sheet with which to concoct fiendish head-scratchers."

Not to mention that Nintendo haven't been "remaking the same game over and over" any more than all the other popular videogame franchises. Much less, even, since they're not releasing a new part of each series every other year.

I feel awful. This is all my fault for not buying any Nintendo stuff.

they'll be fine. The fact that the yen is strong is not helping them at all and is in fact the BIGGEST reason they might post a loss.

Also, I fully expect that people won't give the Vita any crap if it has just as much of a slow start as the 3DS did.

JediMB:

Sounds like you should read Edge's review before speaking out if ignorance.

Not to mention that Nintendo haven't been "remaking the same game over and over" any more than all the other popular videogame franchises. Much less, even, since they're not releasing a new part of each series every other year.

I would also add "Gee, where did you curb that argument from? Was it Yahtzee, Spoony, or any of the other boring trolls who resort to strawman arguments to get their way? Unoriginal, huh?"

Getting excited about the release of a new platform is okay, but when you release it too early without enough titles and at too high a price...

If Nintendo was ashamed of cutting the price on the 3DS, Miyamoto & Co. must be contemplating hari-kari...

JediMB:

Oh, my mistake. I should have written Mario, Zelda, bowling and tennis.

But seriously, what is that list? All I see is Mario, Zelda, Donkey Kong, shitty games and remakes. Well maybe a small handful of games which I'd get. Compare that with what's available for the PS3.

Aiddon:
they'll be fine. The fact that the yen is strong is not helping them at all and is in fact the BIGGEST reason they might post a loss.

Also, I fully expect that people won't give the Vita any crap if it has just as much of a slow start as the 3DS did.

JediMB:

Sounds like you should read Edge's review before speaking out if ignorance.

Not to mention that Nintendo haven't been "remaking the same game over and over" any more than all the other popular videogame franchises. Much less, even, since they're not releasing a new part of each series every other year.

I would also add "Gee, where did you curb that argument from? Was it Yahtzee, Spoony, or any of the other boring trolls who resort to strawman arguments to get their way? Unoriginal, huh?"

did you seriously just call Yahtzee a boring troll? Troll, maybe I can give you that, except not even because a troll trolls for their own satisfaction at the expense of everyone else, a Yahtzee trolls for the satisfaction of all of us.

But boring? not in the slightest. I don't see YOU getting paid for your opinions and witty remarks.

For whom the troll trolls?
The troll trolls for thee.

Sgt. Sykes:

JediMB:

Oh, my mistake. I should have written Mario, Zelda, bowling and tennis.

But seriously, what is that list? All I see is Mario, Zelda, Donkey Kong, shitty games and remakes. Well maybe a small handful of games which I'd get. Compare that with what's available for the PS3.

There's not a shitty game on that list. You were the one specifically saying that Nintendo didn't make any games for the Wii, and so I posted a list of games from Nintendo franchises.

On the Sony side of things, they've pretty much got God of War III, the Uncharted franchise and the Resistance franchise, plus a few more.

If it's third-party games you want, Nintendo aren't the right people to blame if you find there's a lack of them on the Wii.

martyrdrebel27:

did you seriously just call Yahtzee a boring troll? Troll, maybe I can give you that, except not even because a troll trolls for their own satisfaction at the expense of everyone else, a Yahtzee trolls for the satisfaction of all of us.

But boring? not in the slightest. I don't see YOU getting paid for your opinions and witty remarks.

For whom the troll trolls?
The troll trolls for thee.

Not necessarily, but I've become bored with him for past year. His humor has fallen flat and his comedy is just the same crap over and over again which is heresy in the realm of humor (remember, standups change their gigs FREQUENTLY). For example I just CAN'T watch his reviews of motion control or Nintendo products anymore because I KNOW what he's going to say. When the audience knows the punchline it's just not funny anymore. He might as well just become a serious reviewer at this point.

Oh, and GREAT idea for a retort in "well I don't see YOU doing any better." I believe Yahtzee criticized use of that argument YEARS ago.

JediMB:

Sgt. Sykes:
That's what they get for forgetting they actually need to make some GAMES if they want to sell the hardware. What, did they really think they'll be able to sell the Wii just with bowling and tennis, forever?

Just bowling and tennis, you say?

I'm starting to think that The Escapist community in general is not a big fan of the Wii, with only a handful few exceptions, like this fella.

OT: Well... it's been a hard year for The Big N indeed, but as much as it's hard to admit, they brought it to themselves, with a serious lack of software for the Wii this year (yes, I know that Kirby and Zelda are launching this year, but that's it?, just 2 games for an entire year?) and the 3DS' anemic launch didn't help either.

They need to stop treating it's customers as two different entities, yes, they gained lots of new audience with the Wii, but only throwing a few bones for the starving hardcore is just bad.

SupahGamuh:

I'm starting to think that The Escapist community in general is not a big fan of the Wii, with only a handful few exceptions, like this fella.

OT: Well... it's been a hard year for The Big N indeed, but as much as it's hard to admit, they brought it to themselves, with a serious lack of software for the Wii this year (yes, I know that Kirby and Zelda are launching this year, but that's it?, just 2 games for an entire year?) and the 3DS' anemic launch didn't help either.

They need to stop treating it's customers as two different entities, yes, they gained lots of new audience with the Wii, but only throwing a few bones for the starving hardcore is just bad.

My advice, say "fuck it" to the "hardcore" and leave them to starve. Nintendo has never solely aimed at the "core" audience, but at EVERYONE which is why they've built a legacy to the point of being ingrained into the public consciousness.

well i can't really see how they are going to pull themselves out of this
the wiiU will probably fail as much as the 3DS did and what do they have left then?

it will be interesting to see how long a company can keep itself alive with "just" strong first party franchises

Aiddon:

martyrdrebel27:

did you seriously just call Yahtzee a boring troll? Troll, maybe I can give you that, except not even because a troll trolls for their own satisfaction at the expense of everyone else, a Yahtzee trolls for the satisfaction of all of us.

But boring? not in the slightest. I don't see YOU getting paid for your opinions and witty remarks.

For whom the troll trolls?
The troll trolls for thee.

Not necessarily, but I've become bored with him for past year. His humor has fallen flat and his comedy is just the same crap over and over again which is heresy in the realm of humor (remember, standups change their gigs FREQUENTLY). For example I just CAN'T watch his reviews of motion control or Nintendo products anymore because I KNOW what he's going to say. When the audience knows the punchline it's just not funny anymore. He might as well just become a serious reviewer at this point.

Oh, and GREAT idea for a retort in "well I don't see YOU doing any better." I believe Yahtzee criticized use of that argument YEARS ago.

i didn't say i don't see you doing any better, i said i don't see you doing... ANYTHING. and even so, i'm not some performing monkey obsessed with meeting his guidelines and seeking his approval, i'm just a guy who happens to think that even when the videos aren't his best ones, they're still better than most of the crap on the internet. he doesn't adhere to that particular argument, i however think it's completely valid and will continue using it. because to me, i don't see how a person NOT getting paid for their opinion being loved and watched by hundreds of billions of people all over the world and possibly beyond can say that someone who DOES is boring. the market has spoken. and yes, that's a hyperbolic figure.

Sgt. Sykes:

JediMB:

Oh, my mistake. I should have written Mario, Zelda, bowling and tennis.

But seriously, what is that list? All I see is Mario, Zelda, Donkey Kong, shitty games and remakes. Well maybe a small handful of games which I'd get. Compare that with what's available for the PS3.

Realistically the biggest issue with the Wii's lineup vs the PS3 is that it isn't really the Wii vs PS3, but rather it's the (Wii) vs (PS3+Xbox360+PC). There's still a few exclusives that come out for each but for the most part practically every developers have consolidated there releases across 2-3 platforms.

Of course there's no going back from this and it doesn't change the fact that the Wii has an underwhelming lineup compared to the other consoles, but for arguments sake if you were to take the PS3 and remove Xbox and PC cross platform games, so no Elder Scrolls, Mass Effect, Call of Duty, Battlefield, Batman Arkham City, Grand Theft Auto, etc etc, then there games list isn't going to look all that much better than the Wii.

Basically all I'm saying is you gotta give them a little bit of a break as they're competing against 3 simultaneous platforms.

Well all good things have to come to and end eventually.

JediMB:
If it's third-party games you want, Nintendo aren't the right people to blame if you find there's a lack of them on the Wii.

RandV80:
Basically all I'm saying is you gotta give them a little bit of a break as they're competing against 3 simultaneous platforms.

Well you two are right that the miserable lineup of the Wii games is caused by lack of 3rd party support, however:

1) Both the X360 and PS3 have lots of exclusives made by companies other than MS and Sony.
2) Wii, being technologically so far behind (I'm not saying that has to be a bad thing), is also much easier to develop for. So companies who don't have the muscle to make games for the big brothers could just make a game for the Wii. However, most don't - they rather make an Arcade/PSN game. Why? Because Wii apparently isn't that interesting as a developer platform. Despite the fact that it sold the most units.

It seems to me that Nintendo cocked it up quite a bit. If they'd have the right marketing, the right developer support and didn't try to sell the Wii just on the base of bowling etc., they could have had a much more successful console. I mean, how many blogs have been written, how many YT ranting videos have been made by Nintendo USA not releasing good Japanese games? They just thought 'meh, we'll sell more Wiis anyway'. Now they're paying for it.

Of course, it might have something to do with being the 'middle ground' between low-end DS and high-end 360/PS3. Most markets don't like middle-grounds. Still, it's nothing good management couldn't handle.

Sgt. Sykes:
2) Wii, being technologically so far behind (I'm not saying that has to be a bad thing), is also much easier to develop for. So companies who don't have the muscle to make games for the big brothers could just make a game for the Wii. However, most don't - they rather make an Arcade/PSN game. Why? Because Wii apparently isn't that interesting as a developer platform. Despite the fact that it sold the most units.

Well, I'd say PC is the primary platform for these developers.

The reason why not much has happened on the Wii is, I think, that Nintendo don't really understand the indie market. Something that hurt it terribly is the stupid limit for how many downloadable games they allow being released. This is most definitely Nintendo's fault.

Sgt. Sykes:
It seems to me that Nintendo cocked it up quite a bit. If they'd have the right marketing, the right developer support and didn't try to sell the Wii just on the base of bowling etc., they could have had a much more successful console. I mean, how many blogs have been written, how many YT ranting videos have been made by Nintendo USA not releasing good Japanese games? They just thought 'meh, we'll sell more Wiis anyway'. Now they're paying for it.

Here's the tragedy of the Wii: Nintendo always tried to market it towards "everyone", but media disagreed.

Nintendo presented their idea to attract new customers, new gamers, but media reinterpreted that into "Nintendo abandons their fans for 'casual gamers'" (a term Nintendo never used), and it caught on. The fans got pissed off, didn't buy the games aimed at them that were actually released (yet there are dozens of really interesting and genuinely good third-party Wii games) and in response the third-party developers put less and less effort into their Wii releases, which of course made the fans care even less about the platform, and it became stuck in a circle of apathy.

Really, ever since the PlayStation was released, Nintendo has more or less been stuck in a position where the people who buy their consoles don't buy enough third-party games, which of course leads to ever-decreasing third-party support. It remains to be seen if they manage to break the trend with the Wii U, and while I'll cross my fingers - being a big Nintendo fan and all - I will not hold my breath.

They had a damn good run so far, even lucky almost.

Plus, I wonder how much the quake, tsunami and nuclear scare impacted these figures, as it seems to have done a number on every Japanese company in the last few months.

JediMB:

Not to mention that Nintendo haven't been "remaking the same game over and over" any more than all the other popular videogame franchises. Much less, even, since they're not releasing a new part of each series every other year.

No, but the problem lies in that their games lack the factore of core popularity now. Nintendo burned that bridge, and NoA saw to it that NOBODY should be allowed to rebuild it for them (refer to other posts in this topic for why; others detail it much better than I can, or will at this time).

The general gaming populace can forgive a lot (in sales/market appeal) if they buy into hype, regardless of its merits/flaws or how formulaic it is. And Nintendo doesn't have ANY real public, core hype going.

The 3DS has the potential to be a tremendously good system, but if Nintendo continues to shoot itself in the foot in failing to secure those developer contracts, and sticks to churning out the usual parade of 1st party titles and cheap-schlock like it did with the Wii, they will DIE in this changed market.

And by "die", I mean that Nintendo will become the next Sega.

 Pages 1 2 NEXT

Reply to Thread

Log in or Register to Comment
Have an account? Login below:
With Facebook:Login With Facebook
or
Username:  
Password:  
  
Not registered? To sign up for an account with The Escapist:
Register With Facebook
Register With Facebook
or
Register for a free account here