Nintendo Financials: Wii U Still A Drag On The Bottom Line

Nintendo Financials: Wii U Still A Drag On The Bottom Line

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Remember that Wii U price drop? So does Nintendo.

Nintendo's current financials are out, and things aren't looking so great for the Wii U. Though the company's other devices are strong sellers, the Wii U only managed to move 0.46 million hardware and 6.30 software units worldwide in the six months ending September 2013. That Wii U price drop - the one Nintendo said it couldn't afford to make - isn't doing the company any favors. Nintendo says the Wii U markdown in the US and Europe had a "negative impact on Nintendo's profits," contributing to an overall operating loss of 23.2 billion (approximately $236.3 million).

Administration and expenses ate up a gross profit of 62 billion ($631.5 million), and again, Nintendo blames the Wii U, as a substantial portion of those expenses relate to sales advertising and research and development for its next generation console. The Wii U sold as many units in the US - 230,000 - as it did in Japan, from April to September 2013, and the company's really hoping for a bright Christmas. Despite the glut of bad news, Nintendo will not adjust its financial forecast for the year.

"We strive to increase the profitability of our business by accelerating digital distribution of packaged software for both Nintendo 3DS and Wii U that we started last year," says Nintendo, "and improving hardware profitability by reducing its costs." Better hope so, else Mario may need to downsize to a more modest mushroom kingdom. That, or hold one hell of a yard sale.

Source: Nintendo financials

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I can't wait to see the numbers for the holiday season. 3DS sales are going to skyrocket with the release of Pokemon, leaving it's console counterpart in the dust. Know why the 3DS is doing well? It's because it actually has games! Who'd have thought?!

Fappy:
I can't wait to see the numbers for the holiday season. 3DS sales are going to skyrocket with the release of Pokemon, leaving it's console counterpart in the dust. Know why the 3DS is doing well? It's because it actually has games! Who'd have thought?!

It took a while for the 3DS to pick up steam though, the Wii U might do the same. Who knows maybe the holiday season might be the start, there will be a lot of parents after consoles and the Wii U is a fair bit cheaper than the Xbone or the PS4.

I'm not worried (Yet) for the WiiU. Yes, it's sales suck hard right now, but with the Price Cut and the avalanche of first party titles coming, I'm hoping that the WiiU will pick up fast.

If it doesn't have a decent Christmas, then I will worry for the WiiU.

J Tyran:

Fappy:
I can't wait to see the numbers for the holiday season. 3DS sales are going to skyrocket with the release of Pokemon, leaving it's console counterpart in the dust. Know why the 3DS is doing well? It's because it actually has games! Who'd have thought?!

It took a while for the 3DS to pick up steam though, the Wii U might do the same. Who knows maybe the holiday season might be the start, there will be a lot of parents after consoles and the Wii U is a fair bit cheaper than the Xbone or the PS4.

Not to mention it also has more "Family Friendly" titles like Mario and Windwaker. Also that Art Academy App they have for it is absolutely brilliant. Fucking love it.

J Tyran:

Fappy:
I can't wait to see the numbers for the holiday season. 3DS sales are going to skyrocket with the release of Pokemon, leaving it's console counterpart in the dust. Know why the 3DS is doing well? It's because it actually has games! Who'd have thought?!

It took a while for the 3DS to pick up steam though, the Wii U might do the same. Who knows maybe the holiday season might be the start, there will be a lot of parents after consoles and the Wii U is a fair bit cheaper than the Xbone or the PS4.

It's possible, but I'm in the boat of people that think Nintendo's already lost this console generation. The 3DS had a much bigger advantage in its market seeing as its only real competition for hardcore gaming was the Vita (which was/is also struggling). The Wii U still does have a chance, but they simply must make Q4 count.

Despite not owning a Wii U I do hope Nintendo bounces back. I love what they've been doing with the 3DS.

J Tyran:

Fappy:
I can't wait to see the numbers for the holiday season. 3DS sales are going to skyrocket with the release of Pokemon, leaving it's console counterpart in the dust. Know why the 3DS is doing well? It's because it actually has games! Who'd have thought?!

It took a while for the 3DS to pick up steam though, the Wii U might do the same. Who knows maybe the holiday season might be the start, there will be a lot of parents after consoles and the Wii U is a fair bit cheaper than the Xbone or the PS4.

That is true, but at the same time the other consoles will eat into the Wii U market share, where as the 3DS didnt really have any competition when it came out.
I would like to see the Wii U do better (id also like to see it get some games) but i fear with too much competition it will go unnoticed even when games come out.

Well at least the 3DS is doing really well for them and making up for the Wii U

No games are a big point, but I'm also surprised at the utter lack of marketing for the console. I'm not criticizing Ninty's choice not to have a stage at the gaming shows...just that there seems to be very little presence in general ad awareness for Wii-U games, or any Nintendo game, at all.

I suppose they'd have an uphill struggle vs XBONE/PS4, but that doesn't mean they should forego the contest. Then again, I suppose one needs a proper line up in order to do proper marketing.

It's almost as if they should have focused on building a decent library of Wii games before cutting bait and releasing a new console, just 'cause. There are games I want to play on Wii U, but I just can't justify spending that amount on a console that I only want two games for (which is the same problem I have with buying a 3DS just for the sake of Pokemon).

Nintendo! If you build games, we will come (gross).

Looking at past console sales, the WiiU should have been increasing in sales a lot more at this point of the holiday cycle. It looks like the preorders for other consoles are likely carrying on that trend behind the curtains and that's not good for the WiiU.

I don't know that more games will revitalize it. The $300 price point is still harming it in the casual gaming market that exploded the Wii while the limited processing capabilities is making the $100 more machine looking much more attractive with processing and third party support considered.

They're inadvertantly being the decoy of the decoy effect for Sony. Any advantage they had for releasing a year early has been thoroughly lost at this point and if Sony and the XBO deliver what they promised the WiiU may never come back even with a trickle of good games.

The difference with the Wii was that it had a new way to play games that was immediately apparent and it was affordable with great family fun and party games. The WiiU has a $140 peripheral that isn't deemed worth getting with a handful of games that even use it and fewer that actually need it with nearly no game support (first second or third party). It is in error for Nintendo to think that only games are the problem. Yes, if they flood it with a laundry list of great games I would strongly consider it. But I expect their library to have fewer and fewer titles as the WiiU's more powerful brothers come into their own.

It is good, at least, that the DS is in full power. No matter what Nintendo decides to do with their home consoles in the coming years, hopefully the handheld market will remain viable.

So 3 months ending 30th september 2013

DS - 30,000 shipped

Wii - 260,000 shipped

WiiU - 300,000 shipped ( -10,000 from previous quarter for non NA, Japan sales? )

3DS - 2.5 million shipped ( Nintendo's savior)

Shipped first 9 months of 2013

DS - 290,000

Wii - 920,000

WiiU - 850,000

3DS - 5.14 million ( 7.16 million sold first 9 months 2012 )

Though my favourite bit is that according to here

http://www.nintendo.co.jp/ir/library/historical_data/pdf/consolidated_sales_e1309.pdf

Nintendo shipped 10,000 WiiU's to other (everywhere but Japan and NA) in the 3 months ending June 30th 2013 and then had those returned meaning no WiiU's have been shipped to Europe since March.

Mr.Mattress:
I'm not worried (Yet) for the WiiU. Yes, it's sales suck hard right now, but with the Price Cut and the avalanche of first party titles coming, I'm hoping that the WiiU will pick up fast.

If it doesn't have a decent Christmas, then I will worry for the WiiU.

I would give it until Smash and Mario Kart comes out. If those can't move enough consoles, nothing else can.

I like many thought the Wii U was only an add on the Wii system. Imagine my surprise when I found out it was totally new console. But that did little to gain my attention to the unit.Overall I've heard little in the way of games to even get a flicker of said attention. I really haven't seen any advertising for anything Wii U related. Well except for Bayonetta 2. That news made my head turn.

The lack of games certainly doesn't help, but honestly I think the marketing (or lack thereof) is what's doing the most harm here. I barely see any marketing for the WiiU--no TV adverts, no billboards, no internet ads, no nothing. At this point though, I'm not sure what the WiiU can do to gain traction. Considering the difficulties experienced with developing games for the system, Nintendo was probably better off waiting a year to release the WiiU just so they could a) get a better understanding of developing in an HD environment, and b) buffing specs so that it at least has a chance to possibly run any new engines released in the coming years. Releasing earlier honestly brought no benefit to them.

J Tyran:

Fappy:
I can't wait to see the numbers for the holiday season. 3DS sales are going to skyrocket with the release of Pokemon, leaving it's console counterpart in the dust. Know why the 3DS is doing well? It's because it actually has games! Who'd have thought?!

It took a while for the 3DS to pick up steam though, the Wii U might do the same. Who knows maybe the holiday season might be the start, there will be a lot of parents after consoles and the Wii U is a fair bit cheaper than the Xbone or the PS4.

the 3DS had a big turn around as there was really no other competition on the market save the Vita which isnt that much of competition.

The WiiU will have a much harder time as there are real threats to it coming out for the holiday season as well.

Look at all these hopeful faces in the comments section, aahhh... ha, ha, hah!

Unless Nintendo releases a Pokemon MMO for the Wii-U I don't see shit selling GTAV style. Here's hoping for a yard sale.

Mr.Mattress:
I'm not worried (Yet) for the WiiU. Yes, it's sales suck hard right now, but with the Price Cut and the avalanche of first party titles coming, I'm hoping that the WiiU will pick up fast.

If it doesn't have a decent Christmas, then I will worry for the WiiU.

Eh, even if it has a sluggish XMas it's not the end of the world. Nintendo doesn't play by the "rules" that people like to think exist, especially since they've always been a company that thinks long-term. Sony and MS are probably thinking no further than XMas while Nintendo is already thinking into next year at LEAST. When Mario Kart and SSB come out they'll be fine no matter what. There's no reason to rush.

Quantum Star:

Mr.Mattress:
I'm not worried (Yet) for the WiiU. Yes, it's sales suck hard right now, but with the Price Cut and the avalanche of first party titles coming, I'm hoping that the WiiU will pick up fast.

If it doesn't have a decent Christmas, then I will worry for the WiiU.

I would give it until Smash and Mario Kart comes out. If those can't move enough consoles, nothing else can.

I don't think people will jump on a console when 2-3 games come put for it. I can't see many people justifying spending $300 just to play a new Mario game, a new Smash Bros game, and a new Mario Kart game, then having to wait another year or two for the next Legend of Zelda.

Games will help with the die hard Nintendo fans, which there seems to be less of than people thought if current WiiU sales are an indicator.

Nintendo's weakness here is marketing. They've already given up talking about the tablet controller for the most part and still don't seem to want to promote the third party games on their console. Wonderful 101 flopped real hard and that was the only worthwhile 3rd party exclusive for the WiiU. Now what else is there to talk about until next year?

Mario coming out in November? One game to carry it into the holiday season against the release of 2 new competitors? I can't see things getting better for the WiiU any time soon.

J Tyran:

Fappy:
I can't wait to see the numbers for the holiday season. 3DS sales are going to skyrocket with the release of Pokemon, leaving it's console counterpart in the dust. Know why the 3DS is doing well? It's because it actually has games! Who'd have thought?!

It took a while for the 3DS to pick up steam though, the Wii U might do the same. Who knows maybe the holiday season might be the start, there will be a lot of parents after consoles and the Wii U is a fair bit cheaper than the Xbone or the PS4.

A lot of parents still don't know the difference between the Wii U and the Wii. That and with only the new Super Mario carrying the WiiU into the holiday season I can't see many WiiU's flying off the shelves.

The $100 price difference won't slant things in Nintendo's favour either due to the growing median age of gamers. The old stand by of parents buying consoles for their kids is quickly dissolving and most gamers are in their 20s and 30s now. They'll get the $00 console of their choice because both consoles have enough features to justify the extra cost.

AzrealMaximillion:
A lot of parents still don't know the difference between the Wii U and the Wii. That and with only the new Super Mario carrying the WiiU into the holiday season I can't see many WiiU's flying off the shelves.

The $100 price difference won't slant things in Nintendo's favour either due to the growing median age of gamers. The old stand by of parents buying consoles for their kids is quickly dissolving and most gamers are in their 20s and 30s now. They'll get the $00 console of their choice because both consoles have enough features to justify the extra cost.

Yeah, sometimes I wonder whether their situation would be better if Nintendo had just named the damn thing differently. Wii to Wii U sounds more like an alteration of the former rather than a completely new product.

Nintendo -> Super Nintendo -> N64 -> Gamecube -> Wii -> Wii U

They got too greedy/lazy and just wanted the Wii name to carry it's success over to the Wii U, instead of having their new console speak for itself, altogether with a new name. By branding it similarly they alienated the new consumer group they won with the Wii and they are just fine with their Wii cause no new one is out yet, right? And the more well-informed and core gamer groups are looking at the titles and realize that Nintendo still doesn't have that much to offer on the end where it really counts: games.

Once Zelda (not the Wind Waker one), Smash and Bayonetta 2 are out things will be looking up. Whether the Wii U will turn profitable with just those 3... unlikely.
They still have IPs that they are not exhausting like Starfox - they need to release more games.

Quantum Star:

Mr.Mattress:
I'm not worried (Yet) for the WiiU. Yes, it's sales suck hard right now, but with the Price Cut and the avalanche of first party titles coming, I'm hoping that the WiiU will pick up fast.

If it doesn't have a decent Christmas, then I will worry for the WiiU.

I would give it until Smash and Mario Kart comes out. If those can't move enough consoles, nothing else can.

And then they'd be up to what? 5 solid new games after over a year after launch?

Trickle releases isn't going to work. I do expect an increase in sales but the price tag is enough to demand those titles be something new/novel before considering several hundred bucks to play a handful of . Heck, those two games are their most popular titles. But I don't think it'll be anything but short lived. If Nintendo keeps barreling through then sure, I'll buy a WiiU in a year or two at a steeply discounted price and scoop up all those IPs I've wanted from the used bin because they'd be so old by then and they won't get any profit off of it except from their hardware (if they aren't still taking a huge cut).

Nintendo is safe. They can weather this storm. But they missed the mark with the WiiU.

1. Games: Losing most third party support without first party support would drown any machine. Hell, the Gamecube was the most powerful machine of its generation and the cheapest by far and it still held dust. The Wii DEMANDED third party support because they flew off the shelves faster than anything else. The WiiU is shaping up to have the same problem as the gamecube's IP problem while not having the advantage of a drastically lower cost and without having the power to play many of the titles available for the other consoles.

Nintendo also promised some first party IPs for core gamers rather than their regular children and elderly offerings on the Wii. This promise remains utterly unclaimed. Maybe Bayonetta 2 will count.

2. The main peripheral: That it is unnecessarily expensive due to a $140 gamepad that no one really needs that should just be an optional peripheral would also kill most machines like it harmed the PS3 for being so high over the expected price point. That the peripheral is less impressive than our phones regarding its touch technology (the only part of the gamepad that makes it unique as a controller interface) is even worse. It's a single touch (not multi-touch like most of our phones are now) device and only has an inner facing camera which is less beneficial to gaming than an outward facing one. Whether you like the gamepad or not. Consider this, dropping a $140 gamepad and replacing it with a $40 controller of some sort could bring the WiiU down to $200. That or lower, things become a question of what console to get in addition to your Nintendo console rather than what to get instead.

Not only that, but I'll add that you can't buy a Gamepad seperately right now and no game supports multiples anyways. If yours is lost/stolen/broken it'll set you back $140 plus shipping from Nintendo.

Let's keep in mind that we also know that the ps4 is going to allow the use of iDevices and Android devices as gamepads. Likewise, the $140 gamepad price isn't great when considering the Vita is only $60 more and not only allows remote play anywhere in the world but is its own device with exclusive content and media capabilities. The gamepad is just something that recieves and displays information with no processing of its own. You are basically paying for a wireless touch monitor+controller with the gamepad and that's it.

3. The price of the console compared to the alternatives: That the console is only $100 from the ps4 which is undeniably the most powerful console of the generation (now that Microsoft has finally admitted it with their "power isn't everything" speech) makes it look like a worse deal and the ps4 like a good deal. That it doesn't play DVDs or Blurays makes it worthless to the people who still use those things (especially the elderly who went to the Wii in droves) and seriously lessens its value. Remember, the Wii grabbed a lot of business because it was $250 NEW. The alternatives were often double that amount. Failing to have a low price point alienates the casual market that had who enjoy gaming but are looking for the cheaper alternative.

4. The hardware: The initial scheme was already really bad. 8GB for $300, 32GB for $350. This made people evaulate the difference of the console based on GBs in a day and age where $50 gets you 1TB and the alternate consoles have 500GB standard. That the ps4 actually managed to come in at $400 and make a profit there really puts things in perspective. But Sony as a company has the greatest advantage in hardware production so it shouldn't surprise us that a hardware manufacturer beat a software company and a gaming company at the most powerful and low cost console fight.

5. The hardware again: There's no significant jump between this console and the 7th generation. Technologically, it could easily be the most powerful of the 7th generation but the problem is it's comparable to them while still trying to compete with the 8th generation. Honestly, just like Nintendo's late entry into the first generation of consoles (the last year of that generation) that also proved to be their only entry for the second generation, I'd have no problem viewing this console as the last 7th generation console and eagerly await their 8th generation entry. But, regardless of anyone's opinion of what generation this really falls in, the point it isn't significant enough to be percieved "next gen".

WiiU Specs vs 360 specs:

CPU: Both are three core PowerPC CPUs (very similar), 360= 3.2GHz , WiiU=1.243125 GHz (unknown cache
GPU: 360= 500MHz, Wiiu=550 MHz
Memory: 360 = 512 MB (32 MB reserved for OS), WiiU = 2GB (1GB reserved for OS)

So the WiiU has a slower CPU, marginally faster GPU, and just over twice the RAM for gaming. So, it is more powerful, but debatable as to whether or not it's even twice as powerful compared to the 10x the other consoles tout. I also think the flash memory would improve it at least a little so I'd personally put it just under or around 2.5 times since modern gaming doesn't rely on CPUs the same way they did back in the 2000's.

6. Harddrive specifically: 32GB of RAM means that several third party titles won't be available at all even if they wanted to. Not only does it mean that you can't use the system for basic storage, but it means that you'll have to very carefully decide what games you want to download if any. As what must be some kind of joke, the 8GB version of the wii couldn't even download Nintendoland. They've all but killed regular use of the downloadable content.

7. Games tied to the console rather than account: On the ps3/ps4 and 360/XBO, if your console is lost or stolen, you can re-download games on your replacement system because they are linked to your Sony/Live account. On the WiiU, you're screwed.

8. Minimal Online capabilities. From games like Black Ops 2 not including the COD Elite online service to Nintendo announcing that their online gaming focus would be minimal, this makes the console decidedly bad for online gamers. Whether you like it or not, that is a significant portion of the gamer market getting snubbed. Add this to the crappy chatting peripherals and it's pretty bad. The WiiU pro controller doesn't even have a headphone jack.

9. Region locking. Why? They're the only ones sticking in that decade.
10. Marketing. This could easily be first. But people still don't know it's a new console. They think it's a $300 peripheral for the Wii.

What can Nintendo do to bounch back? Drop the gamepad and reflect that in the price. If your console is going to be significantly weaker it should be significantly cheaper. The gamepad should be made an optional peripheral. Patch the handful of games that require the gamepad but can do without and leave the few that can't behind to save the console. Continue to make attractive bundles like they're doing right now by tying the console to popular games they should fare a little better.

I don't know how they'll resolve the game issue. It's not like they could magically have more games in a month if they haven't already been planning on it. Honestly, they really half-assed the lineup this time and that's not something I believe they can come back from. That hardware will continue to bottleneck the third party support and the network being so weak really limits online games.

Not sure how to resolve the marketing problem either. Perhaps changing the name or something like that to make it easier for people to understand that this is the Wii's successor.

All in all. I think they're screwed. They're selling at an even slower rate than the dreamcast did. Slower. That was two generations ago so even selling the same rate would be worse due to a larger target market but this is worse.

 

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