
Nintendo reports first-ever annual loss, projects profitable new year - evo_9
http://www.theverge.com/gaming/2012/4/26/2975416/nintendo-earnings-loss
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bstar77
Back when the Wii was announced, I knew it was going to be a blockbuster hit.
I got my parents to invest a considerable amount of money in Nintendo before-
hand and they ended up profiting quite handsomely. They would have done
better, but their broker convinced them to invest half of what I was
suggesting.

Anyway, the important thing I told them was to not hold on to that stock for
more than 2 years because the Wii would fail spectacularly when HDTV's had
better adoption rates. I was a bit off on that prediction (nintendo stock took
a bit longer to tank), but it seemed so obvious that the Wii would not be able
to compete long-term.

I did not predict Apple destroying their handheld marketshare, but neither did
the rest of the market. What amazes me about Nintendo is that they felt the
Wii could be profitable for so long. I've always looked at the Wii as a
defensive maneuver, it was just a device to give the company a shot at
following it up with something really great. Since that has yet to happen, I
don't think they are even capable of competing in the new market anymore. I
have zero confidence that they can compete with Apple or Sony/MS.

The only thing Nintendo has going for them is their IP. I would not be
surprised if we start seeing Mario and Link on some iOS title in a couple
years. The WiiU will be as successful as the 3DS and everything to follow will
be in steady decline. The world is going to move to iOS/Android/windows phone
for mobile gaming and pay <$10 for games. Sony and MS are going to own on the
game consoles. I just don't see a place for nintendo anymore.

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saturdaysaint
I'm not optimistic. Like Sony, Nintendo's insularity has caught up to them in
a way that can't be easily remedied. The packaged game looks pretty archaic in
a world where just about every game is assumed to be seamlessly multiplayer,
loaded with social features, easily updatable, easy to share with friends. And
yeah, free or $5 if a gamer has some money burning a hole in their pocket. App
Store reviews where gamers complain that something wasn't worth $8 should
chill Nintendo execs. Even the "living room" multiplayer gaming experience
they seem to be banking on might feel out of place in 2012. Guitar Hero-type
games and MS/Sony's awesome Wii competitors seem to have faded. I wonder if
social networks and constant mobile connectivity are fulfilling the hole that
the group videogame experience once filled. The nail in the coffin is that
their whole approach to their IP has been an extreme vulnerability for years:
they've flogged all of it to death. I probably saw more press around Angry
Birds: Space than any Nintendo game in recent memory and I wouldn't hesitate
to say that a new Blizzard game generates vastly more excitement in gaming
circles.

------
debacle
I know it sounds crazy, but I think we've actually reached a point where the
console is dying. The Wii is cool and all, but the prospect of split-screen
Minecraft is not warming.

~~~
talmand
Well, every time I see a statement about some tech hobby device dying I just
assume nothing will change. I'm a PC gamer and I've been told every three-to-
five years for twenty years that my hobby will "die this year". I think Valve
with their money-printing software called Steam would disagree.

The console may change, is already changing, to be just a dedicated
entertainment box hooked up to your TV.

Split screen Minecraft on the Wii? What?

~~~
anonymous
PCs aren't hobby devices. If they die at all, it will be due to tablets
becoming popular.

~~~
talmand
I wasn't saying a PC is a hobby device, me playing games on it is the hobby. I
suppose one day I'll be playing my PC games on a tablet but it has a long ways
to go to convince me that's a superior experience.

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acknickulous
Having seen the Wii U at E3 last year--it being a "clear failure" is
increasingly likely.

I remember when the Wii was shown at E3 2005--lines were HUGE. You had to wait
for hours to get a glimpse of it. Whereas, nobody paid much attention to the
Wii U.

Combined with Apple (and Facebook) completely disrupting the games business--I
don't think it bodes well for Nintendo (or Sony, or Microsoft) in 2013.

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saturn
It seems to me that Nintendo was somewhat blindsided by the rapid consumer
adoption of HD televisions. They've really dropped precipitously in price over
the last few years, and as a consequence the Wii has aged very rapidly,
perhaps more rapidly than expected. I for one would probably be in the market
for a Nintendo system but the chance of my buying a non-HD console in 2012 is
approximately zero.

I'm sure they are rushing to get the new system ready and when they do it'll
be back onto the gravy train for Nintendo.

~~~
christoph
I think that's only one factor. The major shift in gaming that's hit them has
been consumers transitioning from purchasing £20-£40 shrink wrapped games to
£0.69-£1.99 downloads with further revenue from in-app purchases.

I've not "yet" seen the signs that they are adjusting to this model on their
next console. The one area they may be able to focus on that's not taken care
of at the moment is the party/family type games that made the Wii so
successful.

Nintendo is a very old company that has altered it's business many times, so
there's not reason to believe they won't change themselves again.

~~~
wvenable
I don't have high hopes for Nintendo; they have publicly stated they don't
believe that $1-$3 downloads are where they should go and clearly they'd
prefer to continue to sell that same content for $20-$50 in store. Nintendo
will have to fail significantly before they change their business model.

~~~
sliverstorm
It isn't like Microsoft or Sony is embracing the $1-$3 price point for their
AAA titles, either.

~~~
talmand
Exactly, I don't under this "Nintendo will fail because they aren't offering
games in the $1 to $5 range for the Wii like I see on my iPhone" attitude.
We're not seeing any of the console makers considering such a thing. You can
make a point like this for the DS market maybe but isn't it a success?

Plus I've seen talk of increasing mobile game prices to offset the increasing
production costs.

When we see a game of the production and complexity level of Modern Warfare 3,
Battlefield 3, or Skyrim with a retail price of $3.99, only then will Nintendo
fear for their console sales.

~~~
christoph
People didn't buy the Wii for those titles. The consumers wanting to play the
"high gloss" AAA titles, played them on either the 360, PS3 or a high-spec PC.
The Wii only got terrible ports of the MW series which I know of nobody
seriously playing. The Wii sales figures for them are ridiculously low
compared to the other platforms. As far as I can tell < 1 million sales.

Admittedly the Wii did have AAA games in it's own right (Mario Galaxy 1 & 2,
Zelda, Metroid), but these appeal to a very different demographic. The games
that really made the Wii successful were Wii Sports (45 million sales), Wii
Play (23 million sales) and Wii Fit (18 million sales).

How many Wii's did Nintendo sell at Christmas time every year on the basis of
Wii Sports or Wii Fit alone? How many of these are now collecting dust under
televisions with no additional software purchased for them? The major thing
Nintendo got right last time was not making a loss on their hardware.

~~~
talmand
I wasn't saying a $3.99 MW3 on the Wii, I'm saying that price point for that
game regardless of platform. The idea that console makers will quake with fear
because people purchase crappy games on their phones for a few bucks will
translate to poor sales for consoles and console games is an amusing notion to
me.

But I have to say I agree with every statement you made about Nintendo.
Everything you said is true. Therefore Nintendo did exactly what they set out
to do, to make a profitable and successful console. This makes Nintendo a
failure how?

Most of the people I see who complain about the lack of software on the Wii
are most likely not Nintendo's market. I have a Wii and my two daughters will
happily play it whenever we let them, which would be every day if we didn't
restrict it a bit.

The problem they may have with supposed lackluster interest in their console
is when they release the WiiU. The question is whether people who are unhappy
with their Wii will update to the WiiU. I can't say for sure whether I will or
not. But people said the same thing with the GameCube to the introduction of
the Wii.

Not directed totally at you, but in my experience most naysayers have no idea
what they are talking about.

~~~
christoph
Thanks for the agreement & sorry, maybe I wasn't very clear.. :)

I'm not a Nintendo naysayer at all or suggesting impending doom for them
either. I have every Nintendo console going back to the NES with a large
catalog of (much loved) games on each.

I wasn't saying MW3 for 3.99 on the Wii (or any other platform). I was more
saying the market for MW3 doesn't/didn't exist on the Wii (almost at any price
point). High value console games will be around for some time yet, this just
isn't Nintendo's marketplace, nor has it been for sometime. Big blockbusters
will still sell, just only on non-Nintendo platforms.

Nintendo had a great strategy (red ocean/blue ocean) with the Wii that paid
off greatly. It feels a little like their blue ocean isn't really there
anymore. I see all the kids now sitting around playing Angry Birds on iDevices
and it just feels that with the European/US economy in it's current state,
parents are more likely to fill their kids on $2 purchases rather than $20-$30
ones. Especially when there will be a $200-$300 barrier to entry as well.

Nintendo will succeed in their homeland, they always will - I just wonder if
they will do so well in other territories in the next couple of years.

