Forum > Gaming Discussion > Nintendo's Screwed. Really?
Nintendo's Screwed. Really?
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Mon, 02 Nov 2009 09:26:50
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Is Japan's #1 company screwed? When the stories started last week I thought it was just Iwata showing some Japanese humility, but now they just ekep on apologizing and making statement after statement about how they have failed.

I figure that once you have a patent on the money making machine you get the rest of the generation (and a half) off. I mean no matter what happens from this point on Nintendo "won" this round no?

Is this all because the PS3 has started outselling the Wii in Japan? Do you agree with the building consensus about the health of Nintendo?

EDIT: To be abundantly clear, I think this talk is nonsense -- so why is Nintendo playing up the doom and gloom?
Edited: Mon, 02 Nov 2009 10:09:21

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Mon, 02 Nov 2009 10:00:14
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Careful or you'll end up sounding like Pachter. Nyaa

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Mon, 02 Nov 2009 10:12:55
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aspro said:
Is Japan's #1 company screwed? 

Yes, the car sales has dropped down significantly worldwide. Toyota is screwed!
Edited: Mon, 02 Nov 2009 10:13:55
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Mon, 02 Nov 2009 10:25:09
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Iga_Bobovic said:

aspro said:
Is Japan's #1 company screwed?

Yes, the car sales has dropped down significantly worldwide. Toyota is screwed!

Smart ass.

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Mon, 02 Nov 2009 11:04:55
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Here's how sales charts works.

We look at it on a monthly, or even weekly basis (in japan).

Wii can outsell everybody consistently, every month for a couple of (years) by double but as soon as Wii starts being outsold in the monthly sales, its considered to be failing.

Rather than looking at install base or market share, everyone is so caught up in the moment looking at a snapshot of what's happening now, rather than what has happened before.

In short, it doesn't matter how successful you've been, it's how successful you are now. All it takes is a few months of flagging sales for the headlines to become all doom and gloom.

I also think that part of it is nintendo recognising that they haven't served the system with "The next big thing" as Iwata put it. Games like Wii Fit and Wii Sports were but games like that are like lightning in a bottle and games like Wii Music and Sports resort (despite fantastic sales) aren't platform movers.

In 2008 they released a few massive games, Smash Bros and Mario Kart which spiked hardware sales and so far they haven't been able to get the big software out there in a timely fashion, which is classic Nintendo, they are the same as they were on all their past consoles. But unlike other consoles they dont have the luxury of decent 3rd party support to plug the holes.

Iwata realises this.

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Mon, 02 Nov 2009 11:05:57
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Yup, Nintendo is screwed. Bring on Wii HD! Nyaa

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Mon, 02 Nov 2009 12:52:31
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I think they are just surprised that they are no longer making metric fuckloads of cash from the Wii and they now have to actually WORK on something Nyaa
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Mon, 02 Nov 2009 13:24:20
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I've perhaps left out that Nintendo has had a massive 52% drop in profits, but its still profit and financially they are in a rosy position.

And we have to take the drop in perspective to their unprecedented success.

Nintendo's success may never be repeated Says analyst, NSMB wii to be system seller

The ride couldn't last forever

"It is unrealistic for any company in the entertainment industry to believe they can sustain aggressive growth," Jesse Divnich, director of Analyst Services for Electronic Entertainment Design and Research (EEDAR) told Ars. "The appetites of consumers change too frequently when it comes to how we entertain ourselves. The same pace at which an entertainment product can grow is the same pace at which the product can retract."

We've already seen the Nintendo Wii fall from its lofty heights in the United States. Last month the PlayStation 3 outsold the Wii by 29,000 units, an achievement that would have been surreal even six months ago. The Nintendo DS was still the number one selling piece of hardware, but only by 32,400 units.

It's not much better worldwide. "Nintendo, which did not break down quarterly numbers, said it sold 5.75 million Wii machines around the world during the period, far short of the more than 10 million sold for the same six months last year," the Associated Press reported.

How will the price drop affect sales? "We already saw unit sales of the Wii increase substantially in September, so yes, consumers do react to price drops. The question is how long it will impact sales," NPD Group analyst Anita Frazier told Ars. "Looking historically at price drops across a multitude of hardware platforms, there is a wide variance in the sales impact." She does note that $200 is a great psychological price point for consumers.

Divnich claims that Nintendo's success was more than impressive, it was a once-in-a-lifetime event; sales may be buoyed by the price drop, but they'll never reach 2008 levels again. "And that's not to slight Nintendo, I'm just saying that Nintendo's success in 2008 was so massive that it is unlikely anyone will ever be able to repeat it."

Nintendo's secret weapon? New Super Mario Bros. Wii

Nintendo may sound like it's in trouble, but it has one very large advantage coming into this holiday season: a new Mario Bros. title.

Nintendo has claimed the first half of its fiscal year was light on hits, but Frazier points out that this was an industry-wide problem: there just haven't been many monster hits in the past months. "That said, not only should New Super Mario Bros. Wii sell extremely well, but big hits from other publishers (notably MW2) should help improve industry results." It may not be enough to match last year's sales, but she expects a marked improvement in sales coming in the next few months.

handsonmariowii-thumb-640xauto-5972.jpg

Divnich has some bold predictions for New Super Mario Bros. Wii as well. "The New Super Mario Bros. for the Wii will be the best selling game this holiday season, it will even outsell the Xbox 360 version of Call of Duty: Modern Warfare 2," he told Ars. "That is how big of a release this will be. Typically, just one game can't make a difference, but this would be an exception, as New Super Mario Bros will be a large catalyst for hardware and accessory sales for the Nintendo Wii." He puts lifetime sales at over 17 million units, which would make it a hit on the scope of Nintendo's past large successes such as Mario Kart, Wii Fit, and Wii Play.

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Mon, 02 Nov 2009 13:52:30
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I don't get it myself. Whenever I read these articles about Nintendo's profits are down, and  other stories entitled "sales momentum slowing for Nintendo" I just think to myself.... "so instead of earning billions and billions of dollars, Nintendo will only earn billions."
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Mon, 02 Nov 2009 14:58:52

robio said:
I don't get it myself. Whenever I read these articles about Nintendo's profits are down, and  other stories entitled "sales momentum slowing for Nintendo" I just think to myself.... "so instead of earning billions and billions of dollars, Nintendo will only earn billions."

There are other things to consider.

Firstly the recession hit and hit everyone. That the PS3 only managed to top Wii sales with new hardware and a price cut. That Sony is still losing money on every PS3 sold.

That the Wii has had a distinct lack of AAA third party support whilst other consoles can bask in almost monthly big releases.

That Nintendo has been unable to release its next set of heavy hitters, which are mid-development.

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Mon, 02 Nov 2009 15:56:21

gamingeek said:

I've perhaps left out that Nintendo has had a massive 52% drop in profits, but its still profit and financially they are in a rosy position.

You can probably end the discussion as to why with that. Clearly Iwata is alluding to their drop in profits. They are still making more money than everyone but a drop like that should be addressed in some way to the stock holders.
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Mon, 02 Nov 2009 17:19:45
I think it all comes down to expectations. If someone expects to lose one billion dollars a year, and instead ends up losing 500 million dollars, it's somehow a better scenario than someone expecting one billion dollars in profit, and making just 500 million instead.

Disregard what I've just said. I have no idea how financial stuff works.
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Mon, 02 Nov 2009 18:29:42
In terms of company statements, I'll just say that Japanese executives are different than American ones.

In terms of the media, they've been writing Nintendo is doomed stories for years.

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Mon, 02 Nov 2009 18:56:10

Dvader said:

gamingeek said:

I've perhaps left out that Nintendo has had a massive 52% drop in profits, but its still profit and financially they are in a rosy position.

You can probably end the discussion as to why with that. Clearly Iwata is alluding to their drop in profits. They are still making more money than everyone but a drop like that should be addressed in some way to the stock holders.

I think what analysts should do is wait till next year to see firstly if the Wii price cut has a sustained effect, secondly if the Christmas holiday has any sustained effect and to see what happens if anything, happens when the next round of software hits I guess.

I think in general the buzz surrounding the system has died and without sustained AAA releases the system is in its N64 phase of waiting around for compelling new software.

Games like Wii Sports and Wii Fit are these curios that the mainstream media latched onto, it made the system bigger than just gaming. But you can't bank on making games that reach that level of mass awareness and popularity.  

What interests me the most is what Iwata said at E3 when their rivals announced their motion controllers. He said that they must realise that Nintendo wont be standing still either so I get the impression that by E3 next year new hardware, either a new version of wii or the next console will be announced and that it will incorporate some form of new technology in the same way that DS and Wii brought touch and motion.

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Mon, 02 Nov 2009 19:12:45

SteelAttack said:
I think it all comes down to expectations....

This is correct for publicly traded companies. They issue their earnings/ profit expectations, people buy stock based on thse expectations and then if they beat or underperform their stock responds accordingly.


Yodariquo said:
In terms of company statements, I'll just say that Japanese executives are different than American ones.

In terms of the media, they've been writing Nintendo is doomed stories for years.

You can say that again. There is no way a western CEO would b making the kinds of statmnts Iwata is. Can you s Bobby Kotick saying those kinds of things whn t caompany is stil crazily profitable.

As for th mdia being anti-Nintndo, I assume you are talking only about wstrn gaming media, as the broader media falls over thmselves to write good stories about Nintendo.


gamingeek said:


What interests me the most is what Iwata said at E3 when their rivals announced their motion controllers. He said that they must realise that Nintendo wont be standing still either so I get the impression that by E3 next year new hardware, either a new version of wii or the next console will be announced and that it will incorporate some form of new technology in the same way that DS and Wii brought touch and motion.

Yes. I think Iwata is setting the stage for a new hardware announcement.  Stockholders would be pissed if Nintendo spent the money to go to the next step unless it was warranted.  This seems like th most likely reason for his doomsday statements.

Edited: Mon, 02 Nov 2009 19:16:16

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Mon, 02 Nov 2009 19:24:47
aspro said:

As for th mdia being anti-Nintndo, I assume you are talking only about wstrn gaming media, as the broader media falls over thmselves to write good stories about Nintendo.  

 Not necessarily region-specific, but game-oriented news outlets.  The more mainstream the news organization, the more they're going to tilt toward the generic Wii hype story.  On the games media side, they're clawing at whatever they can get, particularly when it comes to sales analysis so they have a reason to post the numbers, and "Has Nintendo finally slowed down?" stories are too easy not to do.

And not being sarcastic here, is there something wrong with the 'e' key on your keyboard?  All the typos are missing Es and that's not really a typical error.

Edited: Mon, 02 Nov 2009 19:25:54

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Mon, 02 Nov 2009 19:26:20
They really need to make a choice of what to do with all the money they have. They either need to bring out new hardware for broader 3rd party support. Or they need to expand and acquire talent to secure more exclusive and better content.

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Mon, 02 Nov 2009 19:33:39

Yodariquo said:
aspro said:

As for th mdia being anti-Nintndo, I assume you are talking only about wstrn gaming media, as the broader media falls over thmselves to write good stories about Nintendo.  

Not necessarily region-specific, but game-oriented news outlets.  The more mainstream the news organization, the more they're going to tilt toward the generic Wii hype story.  On the games media side, they're clawing at whatever they can get, particularly when it comes to sales analysis so they have a reason to post the numbers, and "Has Nintendo finally slowed down?" stories are too easy not to do.

And not being sarcastic here, is there something wrong with the 'e' key on your keyboard?  All the typos are missing Es and that's not really a typical error.

In the past, yes I would say that journalists were sitting on the button as it were, waiting for that slight dip in sales to report.

For instance, bizaarely Gamesindustry reported the weekly japanese sales recentely and the headline was: PSP beats Wii and PS3.

Which was a really bizaare headline to post as firstly portables routinely outsell home consoles in Japan, but also because the DS outsold the PSP. So the headline made no sense.

Recently though as sales have shown, wii sales have seen a highly significant drop, so the headlines are justified IMO. Interestingly they've fallen down to the level of the other guys. So its not doom and gloom but its not gangbusters like it used to be.

It's like Steel said, different expectations.

If you believe the analysts up top, that growth was unsustainable. I keep reading that Wii is ahead of PS2 in the sales curve at this point in PS2's lifecycle though.

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Mon, 02 Nov 2009 19:46:33
The reason I stick to on the Wii sales isn't the unsustainability argument, but the overall market sales having gone down (see: global economic collapse), and the Wii being so fargone beyond everyone else, would then be the biggest drop (it would not be an even distribution).

By no means is this the entire answer.  With the price drop and New Super Mario Bros. Wii, I think we'll see the answer in Q1 next year as to whether or not there really is an overall down-trend, or if we've seen the worst of it.  We'll obviously see big sales during the holidays, but it's a matter of whether we'll see the crazy ongoing sales throughout the year as we did pre-2009.

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Mon, 02 Nov 2009 19:50:19

Yodariquo said:
aspro said:

As for th mdia being anti-Nintndo, I assume you are talking only about wstrn gaming media, as the broader media falls over thmselves to write good stories about Nintendo.  

Not necessarily region-specific, but game-oriented news outlets.  The more mainstream the news organization, the more they're going to tilt toward the generic Wii hype story.  On the games media side, they're clawing at whatever they can get, particularly when it comes to sales analysis so they have a reason to post the numbers, and "Has Nintendo finally slowed down?" stories are too easy not to do.

And not being sarcastic here, is there something wrong with the 'e' key on your keyboard?  All the typos are missing Es and that's not really a typical error.

Keyboard - this is the world's most broken keyboard (laptop) and my browser has no spell check -- I'm very sorry.

Yeah, you were talking about gaming media. And that's not a whack job statement. Nintendo doesn't play with the western media, no exclusives, no art assetts, no chummy PR binge drinking fests (oh and no advertising), so of course they get the shabby treatment.

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