Nintendo lowers forecast from ¥55B profit to ¥25B loss

[Seahawk]

3DS 18M->13.5M
WiiU 9M->2.8M

In the year-end sales season which constitutes the highest proportion of the annual sales volume, software sales with a relatively high margin were significantly lower than our original forecasts mainly due to the fact that hardware sales did not reach their expected level. As a result, the total of selling, general and administrative expenses will surpass gross profit, which leads to an operating loss.
The reason why we will post ordinary income despite the operating loss situation is that we now assume that the yen will be weaker than our original assumptions at the beginning of the fiscal year, which results in foreign
exchange gains.
On the other hand, we expect to post a net loss because we need to reverse deferred tax assets in relation to the losses carried over from the previous fiscal years mainly in the United States, as we can no longer expect our financial performance to recover in the current fiscal year.
Exchange rate assumptions for the fourth financial quarter as well as for the end of the full fiscal year have been revised from 90 yen to 100 yen per U.S. dollar, and from 120 yen to 140 yen per euro in consideration of the recent exchange rate situationOfficial press release (http://www.nintendo.co.jp/ir/pdf/2014/140117e.pdf)

http://www.retrouprising.com/img/2014_01/3171.png

[Slime Slayer]

SH, why are you so obsessed with "Nintendo is doomed!"

---------- Post added at 08:41 AM ---------- Previous post was at 08:34 AM ----------

If anything make a "Xbox 1 is doomed" thread, those things are sittin on shelves everywhere, while PS4's (and Wiiu U for a week or 2) are destroying them, and not even available.

[I am 12 and what is this]

SH, why are you so obsessed with "Nintendo is doomed!"

---------- Post added at 08:41 AM ---------- Previous post was at 08:34 AM ----------

If anything make a "Xbox 1 is doomed" thread, those things are sittin on shelves everywhere, while PS4's (and Wiiu U for a week or 2) are destroying them, and not even available.

http://www.retrouprising.com/img/2014_01/3172.jpg

[Seahawk]

News is news. Sorry it's not favorable to your favorite. Spin it however you like, but numbers don't lie.

Xbox One and PS4 have almost outsold in a few months what the Wii U has sold in one year. Think about that.

[Slime Slayer]

News is news. Sorry it's not favorable to your favorite. Spin it however you like, but numbers don't lie.

Xbox One and PS4 have almost outsold in a few months what the Wii U has sold in one year. Think about that.

But the 3DS has outsold the {(three of them combined + plus the Vita) X2}, think about that.

"Don't worry about Nintendo, Nintendo's not worried about Nintendo." - Sushi X

[Tails]

If anything make a "Xbox 1 is doomed" thread, those things are sittin on shelves everywhere, while PS4's (and Wiiu U for a week or 2) are destroying them, and not even available.Uh, I went to Toys R Us in my area the other day and there were 4 PS4's sitting there available...

Granted there was 10 Xbone's and lots of Wii U's as well, but still, all was there.

[Kugyince]

http://www.retrouprising.com/img/2014_01/3173.jpg

[Seahawk]

If anything make a "Xbox 1 is doomed" thread, those things are sittin on shelves everywhere, while PS4's (and Wiiu U for a week or 2) are destroying them, and not even available.

Anecdotal evidence is pretty lame.
NPD numbers for December are out, Xbox One is best selling next gen console in the USA. Hell, the 360 might have outsold the Wii U, but Nintendo's not giving any specific numbers (I wonder why).
Yeah, USA, but you're not looking at store shelves worldwide.

But the 3DS has outsold the {(three of them combined + plus the Vita) X2}, think about that.

3DS has been sold all year. X1/PS4 have been on the market for two months. Think harder.

Please understand.jpeg

I can't even fathom why Iwata is still allowed to keep leading the company. Four times now (GC, Wii, 3DS, and Wii U) he's failed to keep a steady software pipeline flowing for the company hardware.
Unfortunately I don't even think removing him will help Nintendo at all, they seem to be having major problems across the entire company that go beyond just his position.

[George Riley]

Remember that Nintendo has had bad console sells. Gamecube is a good example of that. One bad system cycle is not going to spell the end of Nintendo. It does however put a lot more pressure on Nintendo to put up a hot selling console the next console generation.

[CrispyChicken]

While the WiiU has been a failure, the 3DS is one of the best systems of all time and is keeping it afloat for now. If Smash 4 and Mario Kart don't sell outrageously, WiiU is all but doomed.

[Slime Slayer]

I'm standing by my prediction that Wii U will start moving units this year, and be selling well by the end of it. Like CP mentioned, the 3DS alone is enough to keep the company going.

[D.B. Cooper]

SH, why are you so obsessed with "Nintendo is doomed!"

---------- Post added at 08:41 AM ---------- Previous post was at 08:34 AM ----------

If anything make a "Xbox 1 is doomed" thread, those things are sittin on shelves everywhere, while PS4's (and Wiiu U for a week or 2) are destroying them, and not even available.

Xbox 1 doomed? Siitin on shelves everywhere? Maybe but in December, they were #1. Yahoo! (http://games.yahoo.com/news/microsoft-takes-back-crown-xbox-one-december-best-140520528.html)

[Slime Slayer]

In the US, in every other country they were beat, and the only reason they beat them was because of supply.

[Jason L. Davis]

Sony will reign on top, Every other Company Is steadily losing steps in the console race!

[Slime Slayer]

Amazon.com Best Sellers of 2014 in Video Games

Ps4 at no. 2, Xbone at no.12, Sony has sold more controllers than Xbone has sold units.

[Jason L. Davis]

Sony's 5,000 votes to XB1's 1,200 votes...lol

[CrispyChicken]

I agree with Steven. I think the only reason Xbone beat PS4 in December was because of supply. They were available the entire month in stores near me but they didn't even ship a new supply of PS4s until around the 20th.

[Seahawk]

Remember that Nintendo has had bad console sells. Gamecube is a good example of that. One bad system cycle is not going to spell the end of Nintendo. It does however put a lot more pressure on Nintendo to put up a hot selling console the next console generation.

The Gamecube was never as bad as this. Nintendo made profit day 1 on GC, and had third party games on it.

Now:
-Third parties have abandoned the Wii U, and what few external games are on them don't sell, so N gets no software licensing revenue.
-Compounding with the above, Nintendo's own first party software isn't selling either.
-They take losses on every Wii U sale. Previously one software title made it a positive transaction, but now the losses are greater due to forced price drops in all regions.
-Retailers hate it. Nintendo has had to compensate retailers for the dropped price and shelf space, especially in Europe and Australia where the machine is catatonic. In addition they are sitting on a huge inventory that requires cost to store.
-In the GC days there was an acceptable stream of software coming from them....now it is very clear that they are having serious problems with games development across the board.
Last year around this time Nintendo broadcast annoucements. (http://www.nintendo.com/nintendo-direct/archive/01-23-2013/)Lets look what's happened to most of those games.
Bayonetta 2 - No info
Yarn Yoshi - No info
X - No info
SMTxFE - No info
New Zelda - No info, unless it was Zelda Musou, in which there is still no info other than prototype footage.
Mario Kart 8 - No info except for a few trailers. Probably delayed to late summer or fall.
Smash - More or less same as MK8, at least it shows signs of progress (based Sakurai).

Really, really distressing stuff. It doesn't inspire any confidence at all.

[D.B. Cooper]

I agree with Steven. I think the only reason Xbone beat PS4 in December was because of supply. They were available the entire month in stores near me but they didn't even ship a new supply of PS4s until around the 20th.

This is probably true but a really dumb move by Sony. On the day I decided to make the plunge and buy a new console I was still on the fence about which one to buy. When I went to shop and only the Xbox was available, my decision was made easy.

[Dudebro]

You're right DBC that was really dumb. I heard some people bragging about how Sony wasn't able to stay on the shelves. My first thought was "how do they expect to keep making money if they're this unprepared?".

[CrispyChicken]

Oh yeah I totally agree. They probably would've won in December if the had the units available. A silly move there by Sony to not have enough units prepared. I mean most of the signs pointed to Sony blowing out Xbone early, you would think they would have more available very soon after selling out.

[Slime Slayer]

Supplies were limited because they were spread out over more countries, they actually produced more units than than MS. (I think)

[Dudebro]

Well then they should've made more. It's not like the xmas season was a surprise for them.

[Slime Slayer]

Well then they should've made more. It's not like the xmas season was a surprise for them.

I'm quite certain that it was not a conscious decision.

[Dudebro]

I just see no excuse for not being prepared for the busiest shopping season of the year. If they were short on systems they screwed up big time.

[Kugyince]

Steven is correct, the PS4 has launched worldwide while the One was only launched in select countries.

While DB is correct and more units should have been made, the window between final approved design and launch was probably too narrow to manufacture more than a few million units. The only way Sony could have manufactured more units before launch would have been to postpone the launch date and thus missing the Christmas season which would be unthinkable in a marketing standpoint.

Any new piece of hardware is at first slow and expensive to manufacture. As time goes by, cost of parts will become cheaper and R'n'D will undergo numerous VAVE meetings, thus the units will become cheaper and faster to manufacture.

[Seahawk]

In a snap news conference called in Osaka, Nintendo President S (http://topics.wsj.com/person/I/Satoru-Iwata/744)atoru Iwata admitted he had misread the markets and hadn't issued "the appropriate instructions.'' He said the company needed to change and "propose something that surprises our customers."
"The way people use their time, their lifestyles, who they are—have changed," Mr. Iwata said. "If we stay in one place, we will become outdated."
Mr. Iwata also said Nintendo was considering a "new business structure," but declined to give further details. The company plans to hold a strategy briefing on Jan. 30.

The Kyoto-based company's struggles come amid broader concerns about competition for console-based videogames from free or inexpensive offerings played on PCs, smartphones and tablets. Sales of new software for consoles had fallen for more than a year in the U.S. until last fall, when there was a slight uptick just before the new Sony and Microsoft consoles arrived. But software sales by U.S. retailers dropped again in November and December, according to market researcher NPD Group.

Mr. Iwata noted that Nintendo's sales in Japan were better than they were in the U.S. and Europe, and said the company needed a better way of keeping in touch with trends abroad.

"In Japan, I can be my own antenna, but abroad, that doesn't work," he said.
Nintendo Forecasts Loss on Dismal Wii U Sales - WSJ.com (http://online.wsj.com/news/articles/SB10001424052702303465004579325760899958956)

Change for real on the 30th? Or more empty promises?

[Kugyince]

If change, change for the worse.

Mobile Mario here we come.

[Slime Slayer]

If change, change for the worse.

Mobile Mario here we come.

No, they would sooner cut a deal, "the mario phone" They are not gonna throw any ip's to the wolves.

[Dudebro]

You never know Steven. When companies start seeing losses like this they explore all their options. It's not a charity right?

[Slime Slayer]

Personally I think it's being blown out of proportion,I bet they will just continue down their same 3DS WiiU path.

[Dudebro]

Continuing down the same path will probably lead them right where you don't want them. They need to change something or get left behind.

[Seahawk]

If change, change for the worse.

Mobile Mario here we come.


“The spread of smart devices does not spell the end of game consoles. It’s not that simple,” President Satoru Iwata said at a news conference Friday. The key is to figure out a way to use smartphones to make people aware of Nintendo’s games, and encourage them to try out the console version of the games, Mr. Iwata said.

“It doesn’t mean that we should put Mario on smartphones,” he said.

Nintendo's Woes Don't Mean Game Over For Its Consoles - Japan Real Time - WSJ (http://blogs.wsj.com/japanrealtime/2014/01/20/nintendos-woes-dont-mean-game-over-for-its-consoles/)

[Kugyince]

No one cares what he says anymore. Soon he'll be relocated to a corner office (which is like being shamed in Nippon business culture). Eventually forced to retire and move on to a smaller company where he'll make little to no impact on the industry anymore. This will all lead to an untimely death, alone and unloved.

Say "hi" to Gunpei for us.

[Seahawk]

That was unexpected.

[Kugyince]

Sorry, dark humor.

[CatalystiCam]

Xbox ones are selling? That's weird.

[Dudebro]

Why is that weird? It has a built in rabid fanbase from the 360 and it's not the WiiU. Nowdays you either buy an xbone or a PS4.

[Slime Slayer]

Xbox ones are selling? That's weird.

They are far less desired than the PS4 though.

[Dudebro]

But more desired than the WiiU right?

[Seahawk]

Sorry, dark humor.

It's all right, throwing out Yokoi is absolutely Nintendo's darkest moment.

[Kugyince]

But more desired than the WiiU right?

At this point, a colonoscopy is more desired than the Wuu.

It's all right, throwing out Yokoi is absolutely Nintendo's darkest moment.

Technically he quit. But again, they moved him away from all the action just to collect a salary and dust. It was kind of like giving a lead detective a desk job.

[Slime Slayer]

But more desired than the WiiU right?

Yeah, but that's not saying much since it's still brand new.

[CatalystiCam]

I was under the impression most people were ticked off at Microsoft. That's all. That's what I get from anyone I talk to. Plus the hardware is inferior to ps4. Then again Macs and iPhones still sell for outrageous prices when the hardware is awful. People under the false impression they're good. Could happen in the gaming market too I guess, to a lesser extent of course. Xboxone isn't the level of awful by contrast that Macs and iPhones are.

[Slime Slayer]

There are a lot of people who have turned their backs on MS, and they are vocal, but there are still tons of people who are oblivious to everything and and have the idea that Xbox is the best engraved into their brains.

I just made a straw poll and I'm about to post it on /v/, guaranteed PS4 doubles, maybe triples Xbones votes. Stay tuned.

Straw Poll (http://strawpoll.me/1059382)

---------- Post added at 10:41 PM ---------- Previous post was at 10:39 PM ----------

/v/ - Video Games (http://boards.4chan.org/v/res/228415179)

[Dudebro]

but there are still tons of people who are oblivious to everything and and have the idea that Xbox is the best engraved into their brains.
Kinda like the people who think the WiiU is just in a slump?

[Slime Slayer]

Currently 27-2 lol. Just gonna bump the topic once.

---------- Post added at 11:09 PM ---------- Previous post was at 10:57 PM ----------

46-8

---------- Post added at 11:24 PM ---------- Previous post was at 11:09 PM ----------

Kinda like the people who think the WiiU is just in a slump?

Errr... no?

[Dudebro]

Of course not!

[Slime Slayer]

Of course not!

You might wanna relax for a bit.

[I am 12 and what is this]

You might wanna relax for a bit.

"Please understand."

[Dudebro]

http://www.retrouprising.com/img/2014_01/3186.jpg

[CrispyChicken]

It's ok, I still love Reggie :p

[ARedLetterDay]

Nintendo Stock Returns to Normal, Nobody Reports It | GaminRealm.comGaminRealm.com (http://gaminrealm.com/2014/01/23/nintendo-stock-returns-normal/)

Just saying.

[Dudebro]

Did anyone really expect it not to go back up?

[CrispyChicken]

Did anyone really expect it not to go back up?

Yeah probably people who saw a giant drop and don't understand how stocks work.

[Slime Slayer]

They way he internet reacted you'd think that the sky was falling. Seriously for a few days there were doomed threads everywhere.

[Dudebro]

Well come on it is big news to hear Nintendo is doing badly in the gaming market. They've been practically untouchable for decades, people love to see the big guy get knocked down a peg.

[CatalystiCam]

Nintendo's the big guy? Not the computer empire with the richest man in the world at the helm, or the general electronics empire.

[ARedLetterDay]

Yeah, the world's largest gaming company by revenue that has been around since 1889 (although, granted, not in the gaming market) is the big guy, hard to believe, right? :p

[CatalystiCam]

Comparatively to the other 2 companies as companies, yes.

[Seahawk]

"We cannot continue a business without winning," Iwata said on Friday during a press conference attended by Bloomberg (http://www.bloomberg.com/news/2014-01-17/nintendo-forecasts-net-loss-on-stagnating-sales-of-wii-u-games.html). "We must take a sceptical approach whether we can still simply make game players, offer them in the same way as in the past for 20,000 yen or 30,000 yen, and sell titles for a couple of thousand yen each."

"We are thinking about a new business structure," Iwata added. "Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business. It's not as simple as enabling Mario to move on a smartphone."

News: Nintendo 'thinking about a new business structure' - CVG US (http://www.computerandvideogames.com/445870/nintendo-thinking-about-a-new-business-structure/)

[Slime Slayer]

Nintendo is actually a bigger brand than Sony, both are miles away from MS though.

[D.B. Cooper]

My observations from watching my 6 and 9 year old kids and their friends. Just in the last 6 months to a year I'm noticing a shift away from the 3DS and into playing apps on these new pads. My kids rarely play their 3DS anymore. My son opts for his ipod and my daughter plays on a Kindle. Sometimes they borrow my phone to play the apps I have on it. When they get together with friends they leave their 3DS's at home and play ipads and ipods. It seems Minecraft is mainly to blame but they've started playing some new game I've never heard of. If Nintendo doesn't make some major changes, I could see sales for this product drop as well. My opinion is that Nintendo is getting killed on all fronts and if they don't figure it out, it's not going to be pretty.

[Kugyince]

I've noticed the exact opposite with my 9 year old and his friends.

[Slime Slayer]

Same, my sisters 7 year od son in-law and his buddies are obsessed with Mario. Here's his video showcasing his favorite characters.

https://www.youtube.com/watch?v=bZ9c4JnPrP0

[Dudebro]

Maybe you guys influenced your relatives and siblings with your rabid Nintendo fanboyism?

[Slime Slayer]

Maybe you guys influenced your relatives and siblings with your rabid Nintendo fanboyism?

Not in my case, I've never talked to him about games. (he lives 1000 km's away and I see him once a year)

[Dudebro]

Well I did qualify my guess with a "maybe" so I'm technically not wrong and don't have to correct my hypothesis.

[Kugyince]

I've certainly steered my son in the correct direction. How many other 9 year old Americans play the Etrian Odyssey series after all?

Then again, most boys his age tend to imitate their fathers. It's pretty normal for him to want to do the things his old man enjoys.

Also, I would be remiss as a parent if I didn't take a keen interest in the types of media he was exposed to. Unlike most parents these days, I do my job. That's including watching all the crappy shows he likes and reading a new book series that he's taken an interest in. So yep, guilty of parental influence here. :)

[Slime Slayer]

Well I did qualify my guess with a "maybe" so I'm technically not wrong and don't have to correct my hypothesis.

I thought you were asking a question.

[Dudebro]

I was proposing a theory, big difference.

[Slime Slayer]

Well leave the question mark off next time.

[ARedLetterDay]

Dudebro and SC13 are like an old married couple, it's so cute.

[Dudebro]

Well you know the saying, you always hurt the ones you love. Speaking painful love, Nintendo must really love it's customers and shareholders!

[Slime Slayer]

Oh don't mind Dudebro, that's just his way.

[Dudebro]

I hope you realize that apologizing for my behavior only adds to the married couple joke. You know better than this, don't embarrass me.

[Slime Slayer]

I hope you realize that apologizing for my behavior only adds to the married couple joke. You know better than this, don't embarrass me.

Relax and drink your tea dear.

[Seahawk]

Japanese newspaper The Nikkei just reported (http://www.nikkei.com/article/DGXNZO65962400Y4A120C1TJ0000/)on its website (2am Tuesday JST) that Nintendo is finally going mobile within this year. According to the country’s biggest business publication, Nintendo will make such an announcement this Thursday, the day it holds a briefing for investors.

But Nintendo will not simply put Mario, Pokemon or other games on smartphones. According to the report, Nintendo plans to use Android and/or iOS devices (not confirmed at this point) to market its console games.

To be more concrete, The Nikkei writes that Nintendo wants to use smartphones to expand its potential user base by spreading information about new game releases, i.e. by using video to introduce future titles. (This will probably happen through some kind of official Nintendo app.)

In addition, Nintendo is said to be planning to put so-called “mini games” on smartphones, playable demos of console games – content that can only be purchased in full on Nintendo hardware. The reasoning here is to give smartphone-only players a taste of the experience without making the actual game available on non-Nintendo devices and convert these users into Nintendo customers.
Report: Nintendo To Finally Go Mobile This Year (But In Its Own Way) | Dr. Serkan Toto – Japan Mobile And Social Games Consulting (http://www.serkantoto.com/2014/01/28/nintendo-smartphones/)

[Dudebro]

Sounds lame.

[CrispyChicken]

The only thing I can see this being useful for is this:

In addition, Nintendo is said to be planning to put so-called “mini games” on smartphones, playable demos of console games – content that can only be purchased in full on Nintendo hardware. The reasoning here is to give smartphone-only players a taste of the experience without making the actual game available on non-Nintendo devices and convert these users into Nintendo customers.

Nintendo honestly does not need to get involved with mobiles.

[Dudebro]

To me it's lame because it's not enough. Either go all in or don't go at all. This feels like they're being too cautious and it's gonna back fire.

[Slime Slayer]

Just want to point out that Nintendo has enough money in the bank to continue this pace for 20 years.

[Seahawk]

Investors meeting liveblog: Live: Nintendo Addresses Its Future Strategy - Digits - WSJ (http://blogs.wsj.com/digits/2014/01/29/live-nintendos-strategy-briefing-to-address-future-direction/)

---------- Post added at 09:55 PM ---------- Previous post was at 08:13 PM ----------

Official slides (http://www.nintendo.co.jp/ir/en/library/events/140130/index.html)

Quick notes:
-Iwata apology
-Not exiting hardware market
-Increase Wii U appeal by focusing on Gamepad features
-DS Virtual Console for Wii U
-Mario Kart 8 worldwide release in May
-Continued reliance on solid 3DS sales
-Transfer to account based system via Nintendo ID
-On smart devices: "It is our intention to release some application on smart devices this year that is capable of attracting consumer attention and communicating the value of our entertainment offerings, so I would encourage you to see how our approach yields results."
-More flexibility on purchases on digital front
-License out 1st part characters to outside parties

*completely different stuff*
-Expansion in a more health/lifestyle side business (Quality of Life or QOL)
-Using health market as a first step
-Seriously just go read those slides

Before you go crazy, know that this isn't entirely unprecedented -- Konami already does a similar thing (video games are actually a tiny part of that business now), this idea has already been mentioned before by Nintendo (E3 2008(?) Vitality Sensor).

[Slime Slayer]

-License out 1st part characters to outside parties

What slide was this next to?

[Seahawk]

Third page, "Active Utilization of Character IP". I'll just copy it here.

http://www.retrouprising.com/img/2014_01/3204.jpg
Also, we are planning to utilize Nintendo’s abundance of character IP more actively. I think the reason that Nintendo is now considered to have this “abundance of character IP” is perhaps because of our passive approach toward the character IP licensing business, which tends to have a high risk of damaging the value of the character. In other words, we think that spending time to develop our approach of having our characters appear mainly in our carefully selected games has created our current fortunate circumstances. However, we are going to change our policy going forward.


http://www.retrouprising.com/img/2014_01/3205.jpg
To be more precise, we will actively expand our character licensing business, including proactively finding appropriate partners. In fact, we have been actively selling character merchandise for about a year in the U.S.
Also, we will be flexible about forming licensing relationships in areas we did not license in the past, such as digital fields, provided we are not in direct competition and we can form win-win relationships.
By moving forward with such activities globally, we aim to increase consumer exposure to Nintendo characters by making them appear in places other than on video game platforms.

It doesn't mean just games, it's merchandise as well. Maybe that sounds obvious but Nintendo generally doesn't sell that stuff outside of Japan.
Maybe things beyond just consumer merchandise as well.

[Slime Slayer]

Well that's not very clear now is it? Talk about beating around the bush, yeesh.

[Kugyince]

Pro:
Account based system finally.

Con:
DS VC on Wuu instead of 3DS makes no sense at all.

[Slime Slayer]

Con:
DS VC on Wuu instead of 3DS makes no sense at all.

Figure it's just because the former is the one struggling.

[Seahawk]

Well that's not very clear now is it? Talk about beating around the bush, yeesh.

Iwata is usually like that.

[Kugyince]

@Steven: I wouldn't worry about them licensing out 1st party characters. They already do this.

[Slime Slayer]

@Steven: I wouldn't worry about them licensing out 1st party characters. They already do this.

As long as everything is kept on a tight leash, I'm not worried.