Nintendo released its financials Thursday, stating an estimated annual operating loss of 45 billion yen ($575 million). This estimate was far higher than the 4.2 billion yen loss estimated earlier in the year. Part of this is attributed to declining sales of the Wii at the end of the console's run, and terrible sales of the much anticipated 3DS. Sales of the 3DS were so poor that Nintendo was forced to drop its price only 6 months after release. Nintendo's common stock dropped to its lowest levels since 2004, before the launch of either the DS or the Wii.
Nintendo has also been seeing Sony and Microsoft cut into the Wii's market with the Playstation Move and Xbox Kinect respectively.
I find this interesting after Shigeru Miyamoto's stepping down as head of game design in early December. I can't help but think that the move was related to the state of Nintendo's sales. Expect a paradigm shift in Nintendo toward different marketing strategies as they adapt to stay competitive in an ever expanding gaming market, with companies like Google (Google TV) and Apple (iPad) taking larger shares.
Source: Reuters
One bright spot at least is that Legend of Zelda: Skyward Sword has been the fastest-selling Zelda title. But is it enough?
What does this mean long-term for Nintendo?
It translates to roughly $575 million, not billion. :P
ReplyDeleteBut I really think they might have shot themselves in the foot with the Wii U, can't see that selling too well, so I don't think their future seems too bright atm.
fixed, yea $575 billion would have been really bad. And I agree, I can't see the Wii U selling well either.
DeleteThat`s a big loss. Well, for me it would be. Don`t know what that kind of a sum means for Nitendo company.
ReplyDeleteWe need Nintendo more than ever in a changing gaming world. They are the only really true gaming company left.
ReplyDeleteWhats it mean for Nintendo? Nothing.
ReplyDeleteI see it as a bump in the road, 3DS seems to be back on track after that price drop. Hopefully they'll rethink their WiiU strategy
ReplyDeleteHard to hear but to be honest they have been making some major terrible decisions...
ReplyDeleteSounds like a nice little write off in the states. Sales jumped for the 3DS at the end of the year for the holidays thanks to Mario Kart 7 and this year is even better news with more games coming in February . Their goal is to go up against the Playstation Vita . I wouldn't count them out yet. If anything, it just means more competition for better handheld games from both systems. As for the Wii U... a tablet and console combo has big possibilities as long that the price isn't to high.
ReplyDeleteIf ps3 and Xbox and Wii are for couch potatoes only Nintendo was there for people on the move. No wonder why they are at loss.
ReplyDeleteThey need to make more for competitive players, instead of doing gimmicks, like the Wii controller. It's fun for a while, but doesn't last as long as a Xbox, PS3, or even a PC.
ReplyDeleteIt means they're gonna innovate and come up with something amazing within a 5 year radius. They won't just allow themselves to run dry, come on.
ReplyDeleteGotta come out with that HD Wii, whatever happened to that?
ReplyDeleteNintendo is pretty big, if they're seeing losses like this I'm sure they've already got something up their sleeve.
ReplyDeleteThey'll get back on their feet. They always do.
ReplyDeleteAlso nice blog, following!
Afraid they asked for it. Let's be real, they made a ton of money in the past several years by selling a gimmicky systems for more than they cost to make, unlike all other gaming consoles that take a hit on the console sale and recoup the losses in game sales. The only good games released on the system are part of a long standing franchises, because none of it's good games require the "motion technology" fundamentally (or in a way the six-axis, move, or kinect can't handle better), so there is no reason for a developer to wright a game for the wii to be released in SD when you can easily get it out on the PS3 and 360 in HD. Honestly, I love those Nintendo franchises, but they deserve to take a hit after being so boastful about scamming everyone in the world with the wii, give them something to think about.
ReplyDeleteJust because there is new technology does not mean they have to turn it into a video game. 3D tech is still very lame. ALSO have you played with the Nintendo 3DS ? it hurts my eyes.
ReplyDeleteNooo Nintendo, you can't fail us! Quick, release another Wii!
ReplyDeleteOh noes! They're so poor now. :P
ReplyDeleteSure had been a great loss with their gaming console and gaming device.
ReplyDeleteThey need something new!
ReplyDeleteNintendo needs to stop marketing to the kids and give up on their childish games and make more mature titles and systems. Thats where the money is at. Not everyone wants another damn mario game.
ReplyDeleteOuch, i think the 3DS was kind of lacking in it's debut lineup of games. If there were more games then the price would've been a bit more reasonable.
ReplyDeleteI knew by continuing to focus on kids and elderly this was bound to happen, still sad to hear though
ReplyDeletemaybe I'll buy a wii out of pitty finally, since I've been so adamant against it all this time...
Nintendo's stock price is still too high...
ReplyDeleteIt's the beauty of a free market economy. Either make a product that meets the needs of the market, or die off and be replaced by a company that will. Econ 101
ReplyDelete