Nintendo Braces For First-Ever Annual Loss

[Andy Chalk]

Nintendo Braces For First-Ever Annual Loss

Nintendo is about to post its first full-year financial loss in 30 years.

It wasn't all that terribly long ago that Nintendo's dominance of the videogame market was absolute. Despite gimmicky motion controls and anemic hardware, the Wii ruled the console playground with an iron fist while the DS went more or less entirely unchallenged in the handheld market. But things started to slow down in 2009 and now Nintendo appears to be almost in full rout.

The company has forecast its first annual loss since it began reporting financials back in 1981 - in other words, for all intents and purposes its first full-year loss ever. Nintendo said yesterday that it expects to suffer a loss of ¥20 billion [$264 million] for the year ending March 2012; coincidentally, in July the company predicted full-year profits of the same amount. Sales for the fiscal year are now expected to come in at ¥790 billion [$10.4 billion], down from an earlier forecast of ¥900 billion [$11.9 billion]. Total sales over the previous fiscal year were ¥1.01 trillion [$13.2 billion].

Despite looking all but unstoppable during the heyday of the Wii, Nintendo is caught in a bit of a perfect storm these days. Falling prices on the Xbox 360 and PlayStation 3 have made the technological gap between them and the Wii harder to ignore, while the DS is being muscled out by increasingly-capable smartphones and the stereotypical "mom gamer" is spending more and more time horsing around with online offerings on Facebook.

The strength of the yen, which is currently riding a post-war high, has also taken a big bite out of Nintendo's profits, a problem compounded by signficantly weaker sales of the 3DS than were expected, which forced the company to drastically cut the price of the unit very shortly after launch.

Sources: Gamasutra [http://www.guardian.co.uk/technology/2011/oct/27/nintendo-forecasts-net-annual-loss?newsfeed=true]


Permalink

 

[Atmos Duality]

Not surprising. The Nintendo Wii party (fad) is over, and they're now forced to play catch-up with their other two competitors.

Honestly, I think it might take some actual new blood on their part to pull through this; Mario, Metroid, Zelda and Pokemon may not cut it on their own anymore.

I've been theorizing for months now, that this Christmas will be a make-or-break season for Nintendo, and it's just the precursor for possible success/catastrophe next year.

If they fail to put up strong numbers this Christmas, we may finally get to see what happens when a giant is backed into a corner..

 

[Scars Unseen]

Well I guess 29 out of 30 ain't bad.

Oh, and Nintendo? I know it isn't really your fault, but one big reason I don't have a 3DS is because I haven't seen a demo station for it yet. When considering the purchase of a 3D device known to give some people headaches and for other people which the device's gimmick simply does not work, having a chance to try before I buy is pretty much mandatory.

Losing Megaman Legends 3 didn't help any.

 

[Worgen]

The launch of the 3ds was pretty rocky, they pushed it out too soon at for too much money... although oddly enough if they had launched it sooner it also might have done better since by the time it came out the 3d crazy was pretty much over, its still neat but not that popular anymore.

 

[Mahorfeus]

It's a shame. The 3DS is a pretty neat piece of hardware, but the lack of a software library didn't help it at all. I imagine that if they waited until the majority of flagship titles were ready for release, then they would have made a lot more money. But as it stands now, the 3DS is at a great disadvantage compared to the PSV.

Given its lower price and upcoming titles, I'd say that its performance will start to pick up in 2012.

 

[nukethetuna]

The 3DS is their biggest problem, really. Honestly, the DS didn't do super well because of the touch-screen. Very few (good games) actually forced you to use that. It did well because as a Nintendo handheld it had a butt-ton of third-party support and solid first-party games. Honestly are there even 20 3DS games out yet? It's gonna be a while before that fire starts, if it does at all.

Either way, they're still sitting on a fortune from the Wii's success, right? So this isn't a huge deal.

 

[rayen020]

this is something i notice about Nintendo and it's not gonna bode well for their future. They tend to plan things really really well. Things tend to go along with these plans, but sometimes (only a very few times) they really really don't. And when they really really don't nintendo always acts in knee-jerk fashion and that ends up causing even more problems. example the 3DS, expected to do well then didn't. Solution; cut the price drastically 1(2,3?) months right after launch. result; alienated hardcore fan base. solution; free crap. Result; even less sales for the people who already had it and alienated people who didn't already have it. Overall Result; A new handheld platform which already seemed gimmicky and had a very small catalog and that wasn't going to bigger very quickly that was now even more stigmatized.

I hope Nintendo can weather this storm because they tend to have problems dealings with problems and that usually causes bigger problems.

 

[Mr. Omega]

Can I make a suggestion? FIRE REGGIE FILS-AIME!

NoA is actively screwing the American hardcore gamers who want titles on the Wii, there is absolutely no American advertising of the 3DS (and they're still trying to push other DS systems, conflicting the interest to sell more 3DS games) or any Wii games, and any games that might garner hardcore interest are either completely under-marketed or just never come here to the states in the first place.

There are good games on the Wii. Great games for the hardcore gamers. NoA (I can't speak for NoJ or NoE) just doesn't ADVERTISE them! I never knew about Wario Land Shake It (an AWESOME game, seriously, it was awesome) until someone I'm subscribed to on Youtube did a Let's Play of it! I didn't know about Lost in Shadow until the ZP review! There is no promotion of material in NoA! Someone clearly isn't doing their job!

As for the 3DS, it was released too early, but now the games are going to start coming in. Still, it didn't help that they over-priced it so much when there was nothing for it. The holidays are going to help, and the games for it are looking awesome (Paper Mario FTW) but the release was a fucking mess.

On a more positive note:

The WiiU does seem to be fixing some other long-standing issues. Better 3rd party support, actual online play, HD graphics, standardized controls but now with a touch-screen... the WiiU could fix a lot of issues.

Still, Nintendo needs to get their shit together. They still make great games. High quality games. FUN games. I'm having more fun with Return to Dreamland than anything else this year. However, there needs to be some serious re-organizing in the administration.

 

[JediMB]

The 3DS was definitely released too early.

Now I'm just hoping they'll hurry up and announce that a slightly larger 3DS with a second analog pad and no region restrictions is coming next year, so I can start planning when to acquire one. >_>

 

[Ilikemilkshake]

Well I guess 29 out of 30 ain't bad.

Oh, and Nintendo? I know it isn't really your fault, but one big reason I don't have a 3DS is because I haven't seen a demo station for it yet. When considering the purchase of a 3D device known to give some people headaches and for other people which the device's gimmick simply does not work, having a chance to try before I buy is pretty much mandatory.

Losing Megaman Legends 3 didn't help any.

Im pretty sure if you just went to a store and asked for a demo they'd be happy to show you how it works and let you see if you bleed from your eyes because of how immersive the 3D is.

OT: Hopefully this will serve as a warning to other companies not to release a game device WITH NO GAMES.
The only one really worth talking about is Zelda and thats a remake, sooo apparantly Nintendo cant just print money like they thought.

 

[RedEyesBlackGamer]

Can I make a suggestion? FIRE REGGIE FILS-AIME!

NoA is actively screwing the American hardcore gamers who want titles on the Wii, there is absolutely no American advertising of the 3DS (and they're still trying to push other DS systems, conflicting the interest to sell more 3DS games) or any Wii games, and any games that might garner hardcore interest are either completely under-marketed or just never come here to the states in the first place.

There are good games on the Wii. Great games for the hardcore gamers. NoA (I can't speak for NoJ or NoE) just doesn't ADVERTISE them! I never knew about Wario Land Shake It (an AWESOME game, seriously, it was awesome) until someone I'm subscribed to on Youtube did a Let's Play of it! I didn't know about Lost in Shadow until the ZP review! There is no promotion of material in NoA! Someone clearly isn't doing their job!

As for the 3DS, it was released too early, but now the games are going to start coming in. Still, it didn't help that they over-priced it so much when there was nothing for it. The holidays are going to help, and the games for it are looking awesome (Paper Mario FTW) but the release was a fucking mess.

On a more positive note:

The WiiU does seem to be fixing some other long-standing issues. Better 3rd party support, actual online play, HD graphics, standardized controls but now with a touch-screen... the WiiU could fix a lot of issues.

Still, Nintendo needs to get their shit together. They still make great games. High quality games. FUN games. I'm having more fun with Return to Dreamland than anything else this year. However, there needs to be some serious re-organizing in the administration.

Yes, NoA seems to actively hate or grossly misunderstand the more dedicated members of their fanbase (Operation Rainfall being a prime example).

 

[JediMB]

That's what they get for forgetting they actually need to make some GAMES if they want to sell the hardware. What, did they really think they'll be able to sell the Wii just with bowling and tennis, forever?

Just bowling and tennis, you say?

Spoiler

Excite Truck
The Legend of Zelda: Twilight Princess
WarioWare: Smooth Moves
Super Paper Mario
Mario Party 8
Pokémon Battle Revolution
Mario Strikers Charged
Metroid Prime 3: Corruption
Donkey Kong Barrel Blast
Battalion Wars 2
Fire Emblem: Radiant Dawn'
Super Mario Galaxy
Endless Ocean
Super Smash Bros. Brawl
Mario Kart Wii
Wario Land: The Shake Dimension
Animal Crossing: City Folk
Disaster: Day of Crisis
Mario Super Sluggers
New Play Control! Mario Power Tennis
New Play Control! Pikmin
New Play Control! Donkey Kong Jungle Beat
Punch-Out!!
New Super Mario Bros. Wii
New Play Control! Pikmin 2
Endless Ocean 2: Adventures of the Deep
Sin and Punishment: Star Successor
Super Mario Galaxy 2
Metroid: Other M
Kirby's Epic Yarn
Donkey Kong Country Returns
Mario Sports Mix
The Legend of Zelda: Skyward Sword
Kirby's Return to Dream Land

 

[Squilookle]

"The strength of the yen, which is currently riding a post-war high"

Interesting- just which war are we talking about, exactly?

 

[JediMB]

There is of course the obligatory Zelda game but im joining the masses of people who are kind of sick of nintendo pulling the same shit decade after decade. Since there have stopped being MASSIVE leaps forward generation to generation just re-making the same game over and over starts to become pretty noticeable.

Sounds like you should read Edge's review [http://www.next-gen.biz/reviews/legend-zelda-skyward-sword-review] before speaking out if ignorance.

"As for those puzzles? How?s this for a statement of intent: not a single torch-lighting number, and only one push-the-box-on-the-button incident. How does it have the nerve to call itself a celebration of 25 years of Zelda? Blame Link?s unusual toys. A flying beetle pulls players up into the rafters as digging claws bury deep into foundations. Add other tools that blow, yank, glide and drag, and designers have a juicy verb sheet with which to concoct fiendish head-scratchers."

Not to mention that Nintendo haven't been "remaking the same game over and over" any more than all the other popular videogame franchises. Much less, even, since they're not releasing a new part of each series every other year.

 

[Aiddon_v1legacy]

they'll be fine. The fact that the yen is strong is not helping them at all and is in fact the BIGGEST reason they might post a loss.

Also, I fully expect that people won't give the Vita any crap if it has just as much of a slow start as the 3DS did.

Sounds like you should read Edge's review [http://www.next-gen.biz/reviews/legend-zelda-skyward-sword-review] before speaking out if ignorance.

Not to mention that Nintendo haven't been "remaking the same game over and over" any more than all the other popular videogame franchises. Much less, even, since they're not releasing a new part of each series every other year.

I would also add "Gee, where did you curb that argument from? Was it Yahtzee, Spoony, or any of the other boring trolls who resort to strawman arguments to get their way? Unoriginal, huh?"