Nintendo Slashes Profit Forecast by Four-Fifths

[Andy Chalk]

Nintendo Slashes Profit Forecast by Four-Fifths

Nintendo has slashed its profit forecast for the 2011-2012 fiscal year by a dramatic 82 percent, blaming a strong yen, weak sales and the big 3DS price cut.

If you think the price cut of the 3DS [http://www.escapistmagazine.com/news/view/111935-Nintendo-Slashing-3DS-Price-by-a-Third] announced earlier today was a big drop, wait until you get a load of this. Nintendo has updated its financial forecast for the current fiscal year, reducing its estimated net income from ¥110 billion ($1.41 billion) to ¥20 billion ($257 million). That's a decline of 82 percent, which makes it not so much a "reduction" as a St. Valentine's Day Massacre.

"The earnings forecast has been modified to reflect the trends of stronger-than-expected yen appreciation and sales performance, the decided price reduction of the Nintendo 3DS hardware and the sales outlook for the holiday season," Nintendo noted in the update. "Exchange rate assumptions have been revised from 83 yen to 80 yen per U.S. dollar, and from 120 yen to 115 yen per euro."

Compounding the troubles at the House That Mario Built is the fact that its share price remains stuck in the mud after tumbling to a five-year low [http://www.escapistmagazine.com/news/view/110929-Analyst-Explains-Nintendos-Tumbling-Stock-Price] following the announcement of the Wii U. An 82 percent slide in expected profits for the year probably isn't going to do much turn that frown upside down. At this point, anything less than an all-out Grand Salami from the Wii U is going to be bad news indeed for Nintendo.



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[Something Amyss]

My biggest hope is that they learn from this and move on. I've wanted to see Nintendo get a couple slaps on the wrist for their recent "ideas," but I don't want to see them out of business.

Maybe just develop a handheld that won't give me a migraine. Or not produce tables for your consoles which are too expensive to sell individually.

And when Sony's bells and whistles is comparably priced to your DS with gimmick vision, something's wrong.

Though hands down, I'd buy a DS before a PSP, simply because I don't care about bells or whistles, I just want games.

 

[Stall]

Looks like that money printer over at Nintendo finally broke (I mean, a Japanese company blaming poor profits in a strong yen is about a cookie-cutter answer as they can give). I knew I smelled something fishy behind that huge 3DS price cut.

 

[Kevlar Eater]

Ah, it's good to see Nintendo get taken down a notch. Now, to hit the other knee...

 

[MrBrightside919]

Well it's always been about the games. Nintendo consoles haven't been graphically superior as of late, but they've always had great games. Why do people like Mario and Zelda...because they are solid titles that you never have to second guess. I didn't need to read reviews to know that Super Mario Galaxy was going to blow my mind....AND IT DID!

I don't care if Nintendo's next console has me in a giant body condom, if I get to play some good games. Obviously, Sony and Microsoft will be right around the corner with their own body condom console soon enough so everyone will be in a body condom sooner or later...

 

[Rednog]

Looks like that money printer over at Nintendo finally broke (I mean, a Japanese company blaming poor profits in a strong yen is about a cookie-cutter answer as they can give). I knew I smelled something fishy behind that huge 3DS price cut.

I don't think there is anything really fishy about it, Nintendo just overestimated the amount of money they would make with the 3DS and re-releasing one of their past game (in this case Ocarina of Time).
They thought it was going to be the money printing machine that the DS was, but Nintendo will continue chugging along to the beat of its own drum and play with gimmicks and just try to rehash the same stuff to hit their magical gold formula that they did with the 3DS.

 

[Sabazios]

Maybe the problem started when they alienated their core fans, and they now realise that the people who were merely there for the 'new hot thing' are shallow and fickle, and wouldn't actually splash out any further, and now they're left with 3 groups: those who didn't buy a Wii, because they disliked the direction Nintendo was going in, those who bought a Wii, and only played Wii Sports and shovelware, and those who bought a Wii, and use it as a dust collector.

Maybe they should make some Facebook games.

This is a short term profit, long term problem kind of thing. They sacrificed it to get the non-gamers into playing games, and when it's shown that many do not want to get any more than a toe wet in the water. For a while, they were happy, but now the consequences of this are showing themselves.

 

[Mr. Omega]

Even though I love Nintendo and enjoy the 3DS, Nintendo did make tons of mistakes with it.

1: Launching it without the Eshop. And failing to market all the cool stuff on it.

2: The marketing focusing on the 3D, not the improved controls, better graphics, better online service and better hardware overall. Instead they market the absolute worst part of the system.

3: Launching without any major titles. All the big ones aren't coming until September or later. Yes, OoT 3D is all well and good, but a remake can't be a system seller. Well it can, but it shouldn't be. The stuff like Kid Icarus, the new Mario Kart, Mario 3DS, Luigi's Mansion (HELL YES!) and Metal Gear 3DS (I know it's a remake, but MGS3 was never on a Nintendo system) aren't coming out for months.

And I'm predicting the Escapist will be going "Nintendo sucks! GIMMICK GIMMICK GIMMICK GIMMICK!" And everyone is going to say this is an act of desperation. No. They made an earlier prediction, they were wrong about how the 3DS would sell, and they are changing another prediction they made accordingly.

 

[Ayjona]

I find it hard to think that the advent of touch screen mobile gaming is not one of the major actors in Nintendo's decline.

(For someone who prefers indie titles to mainstream games, this is no great loss, as both Android and iOS has both indie and AAA titles aplenty. The app culture, with all the easily accessible publishing possibilities the Android and iOS app stores offer, greatly encourages small developers to give their creativity free reign. Indie titles is also the reason I still (occasionally) game on my computer. Indie games have always been one of the consoles' weak points. Though I doubt most console players see that as a great loss, or that it has had anything to do with Nintendo's decline )

 

[DustyDrB]

Lesson: Don't release a console until you know you have a strong library of games coming very soon after the launch, if not coinciding with the launch.

Even though I love Nintendo and enjoy the 3DS, Nintendo did make tons of mistakes with it.

1: Launching it without the Eshop. And failing to market all the cool stuff on it.

2: The marketing focusing on the 3D, not the improved controls, better graphics, better online service and better hardware overall. Instead they market the absolute worst part of the system.

3: Launching without any major titles. All the big ones aren't coming until September or later. Yes, OoT 3D is all well and good, but a remake can't be a system seller. Well it can, but it shouldn't be. The stuff like Kid Icarus, the new Mario Kart, Mario 3DS, Luigi's Mansion (HELL YES!) and Metal Gear 3DS (I know it's a remake, but MGS3 was never on a Nintendo system) aren't coming out for months.

And I'm predicting the Escapist will be going "GIMMICK GIMMICK GIMMICK is why it failed GIMMICK GIMMICK. So let's say GIMMICK even more! GIMMICK GIMMICK GIMMICK GIMMICK! Nintendo sucks GIMMICK!"

Yeah, people forget that video games are evolved from many gimmicks. I don't care about 3D, but that's just me. The DS Stylus should be proof that gimmicks can be great.

 

[koroem]

I really don't understand how or why they could launch the 3DS the way they did. No games, no shop, no way to advertise the benefits of 3d. Furthermore, I don't understand why people bought into the 3d gimmick. And yes it is a gimmick. 3d is in another repeating fad phase like it has been doing over and over since the 1950s. It will be over sooner than later this time hopefully. Then we only have to wait another 10 years for the next big push.

It seems like Nintendo tried to capitalize on it before the fad was over, failed, and are now suffering for it. The WiiU will be on track for this too.

 

[Aiddon_v1legacy]

-washes hands-

That's it, I'm done with people (especially journalists) who cry nothing but doom and gloom for companies. This smacks of just plain WHINING. Nintendo'll be fine. They've survived far, FAR worse

 

[manythings]

My biggest hope is that they learn from this and move on. I've wanted to see Nintendo get a couple slaps on the wrist for their recent "ideas," but I don't want to see them out of business.

Well it's not like this is the first time they've pissed an ocean of cash away on a stupid thing. I'm willing to bet in ten years time (Assuming Skynet/the Apes) aren't in charge they'll make another stupid product. On the flip side for every 3DS there is a Kinect (Though I hate the kinect people have made insane hacks that are awesome).

 

[Frostbite3789]

Maybe the problem started when they alienated their core fans, and they now realise that the people who were merely there for the 'new hot thing' are shallow and fickle, and wouldn't actually splash out any further, and now they're left with 3 groups: those who didn't buy a Wii, because they disliked the direction Nintendo was going in, those who bought a Wii, and only played Wii Sports and shovelware, and those who bought a Wii, and use it as a dust collector.

Maybe they should make some Facebook games.

This is a short term profit, long term problem kind of thing. They sacrificed it to get the non-gamers into playing games, and when it's shown that many do not want to get any more than a toe wet in the water. For a while, they were happy, but now the consequences of this are showing themselves.

I wholeheartedly agree with this. They did make a ton of money up front, but what have they done lately? Especially Nintendo of America. They rejected bringing three actual games to this side of the world. Most Nintendo fans are hard-pressed to name the last really good Wii game. A Nintendo fangirl I work with, could only name Mario Galaxy 2. That came out over a year ago.

All of my friends with a Wii, have it as a dust collector as you said. And even most of them that had it, hated the Wiimote, and played games like SSBB with a controller.

I like it. Aim low so when you do meet expectations later, you can call it a success. Good move Nintendo.

I...hope and think you're being sarcastic. Because they aimed really high and have re-adjusted because it's become increasingly apparent they were going to fail the original expectations by a long shot. That isn't a success, or even aiming low. That's re-adjusting what you thought, because you're dead wrong.

 

[Baresark]

They only reduced their fiscal year forecast. I mean, they aren't going to be laying anyone off over this. They are not in bad shape by any stretch of the imagination. And while the news of the Wii U didn't help their stock, I am willing to bet it will be a homerun, if for no other reason that it will be way more powerful than any other console out there, and has lots of third party support. The industry took a hit, that is all there is to it. Sony and Microsoft aren't reporting any ridiculous profits either.

-washes hands-

That's it, I'm done with people (especially journalists) who cry nothing but doom and gloom for companies. This smacks of just plain WHINING. Nintendo'll be fine. They've survived far, FAR worse

I'm with you on this. This is not really news. We know everyone "hates" Nintendo already. We know Nintendo is not hot at this point. And we know everyone is reporting reduced profit margins.

 

[Atmos Duality]

The Wii-party had to end. Nintendo is just footing the bill for the show.
Now that their fad has finally died, they have to go back to business as usual and business does not look good.

I suspect that their 3DS will sustain them in the long run; it's just a better competitor than the Vita in its own market (not on technical specs, but technical specs couldn't put the PSP ahead of the DS despite years of trying; price did) but the Wii U is going to be a huge gamble for Nintendo.

How do you win back the hardcore market after you have:
1) Constantly and blatantly shunned them for the last 5 years
2) Sat back and watched as your two primary competitors completely saturate the market

It's very easy to forecast Doom for Nintendo at this point.

 

[theultimateend]

Even though I love Nintendo and enjoy the 3DS, Nintendo did make tons of mistakes with it.

1: Launching it without the Eshop. And failing to market all the cool stuff on it.

2: The marketing focusing on the 3D, not the improved controls, better graphics, better online service and better hardware overall. Instead they market the absolute worst part of the system.

3: Launching without any major titles. All the big ones aren't coming until September or later. Yes, OoT 3D is all well and good, but a remake can't be a system seller. Well it can, but it shouldn't be. The stuff like Kid Icarus, the new Mario Kart, Mario 3DS, Luigi's Mansion (HELL YES!) and Metal Gear 3DS (I know it's a remake, but MGS3 was never on a Nintendo system) aren't coming out for months.

And I'm predicting the Escapist will be going "Nintendo sucks! GIMMICK GIMMICK GIMMICK GIMMICK!" And everyone is going to say this is an act of desperation. No. They made an earlier prediction, they were wrong about how the 3DS would sell, and they are changing another prediction they made accordingly.

For sure.

I barely use the 3D on it and I still don't regret buying it. It is a really nice little handheld, they shit on themselves bad by not marketing it properly.

Also the no games thing.

Nintendo represents everything that is wrong with modern gaming:

- Rehashing games so shamelessly it's almost an absurd joke
- Pushing stupid fucking gimmicks down our throats
- Catering to "gamers" who are casual to the point of barely liking the idea of gaming
- Moronic decisions bassed on the assumption that people are sheep (maybe half-moronic because they often are)

I want them to go bankrupt, but still this is good news.

Well on the bright side, if you think that's everything that is wrong with gaming, you will have no end to your disappointment for the rest of your life as a gamer.