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Posted By Robert G. about 9 months, 3 weeks ago
I guess it sort of prints money?
The first quarter financial report is in for Nintendo, and it is a mixed bag in terms of its overall outlook.
The bad news is headline catching, as Nintendo is reporting a ¥17.23 billion ($220 million) loss for the first quarter of the year, the third year in a row for losses in the quarter for Nintendo. Thankfully, the net loss is down from last year’s posting of ¥26 billion ($332 million), but it is still not the sunniest outlook overall.
Apparently, a contributing factor, at least according to Nintendo, is the slowdown in 3DS hardware sales again, which only reach 1.86 million units sold for the first quarter. However, the grand total for Nintendo is now over 19 million 3DS machines sold since its launch last year. Nintendo is also boasting about the hardware and software sales of the 3DS, which increased to 162% and 63%, respectively. Of course, last year’s numbers were fairly miserable. All of this is also likely attributed to the price drop of the system itself that has boosted sales. It also is confirmed by Nintendo that they are no longer taking a loss for every 3DS sold, meaning they can start increasing revenue and income for the following year in the handheld market.
Overall, the report does paint a more sunny outlook for Nintendo as a company, which took their first net loss in over 30 years at the end of the 2012 fiscal year. And with the Wii U bring a huge question mark in terms of its overall launch success, Nintendo is likely looking for any good news financially.
Source: Nintendo Co
Nintendo is in the middle of changing their corporate culture, to be sure. Microsoft and Sony have always launched hardware at losses, while Nintendo has always tried to make a profit from launch. After the 3DS? I doubt Nintendo will make a habit of taking losses; it isn’t a huge company with deep pockets. It’s not a viable strategy for them.
But I definitely think they intend to launch hardware at cost from now on.
The Wii U’s price is complicated. Nintendo may not have negotiated with the hardware manufacturer the exact details of the price, and even more to the point, the Wii U has to make the 3DS’s price point look good without making itself sound ridiculously expensive. Now throw in the 3DS XL into the mix with a price point right in the middle.
It’s very difficult.
I wouldn’t be surprised if one day Nintendo turns into another Sega.
Pretty sure this is why they didn’t announce a set date and price for the WII U they knew this was coming and it might have hurt there stock prices more had they announce the price and it was seen as too high.