Iwata Apologizes For Ugly Nintendo Financials

[Andy Chalk]

Iwata Apologizes For Ugly Nintendo Financials

Nintendo President Satoru Iwata says he's sorry for yesterday's crash-and-burn financial report.

Yesterday was not a good day for Nintendo. The company posted a half-year loss of $932 million and revised its full-year forecast down to a $264 million loss [http://www.escapistmagazine.com/news/view/113858-Nintendo-Braces-For-First-Ever-Annual-Loss], the first time the company has posted a full-year loss since it began making public financial reports in 1981. Today didn't get much better for Iwata, who issued a statement taking responsibility for the company's falling fortunes even as he expressed optimism for the future.

"I feel greatly accountable for missing our financial forecast for the half year ended September and revising downward our forecast for the full year," he said. "As the worldwide number of pre-orders indicated, the Nintendo 3DS had high expectations from consumers as well as market and industry players. However, the actual sales after the launch did not meet the expectations."

That failure to meet expectations led to a drastic price cut that goosed 3DS sales but took a big bite out of the bottom line. On the upside, Iwata said the unit is now selling reasonably well and the company expects things to pick up even further in November with the release of "big titles" for the holidays. The Wii also appears to be picking up the pace.

"The U.S. sales of the Wii for the first three weeks of October exceeded those of the corresponding period a year ago," he said. "[Nintendo of America] also reported that consumers are reacting favorably to the value promotions offered by the retailers. I think this is a good sign for sales growth in the year-end."

Source: MCV [http://www.mcvuk.com/news/read/iwata-apologises-for-nintendo-s-poor-financials/087049]


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[Fappy]

Their problem is that they are investing too much into gimmicky technology. Also, they have been releasing way too many handhelds one after the other. Game Boys/DS's primarily profit off of younger audiences who don't have the funds to buy the newest model every year like college kids and their Apple products.

 

[Hazy992]

Nintendo just need to accept that the game industry is changing. People just don't want the type of products they're selling anymore. People either want hardcore gaming at home like the 360 and PS3 and as for handheld and casual gaming, they'd rather play on their smartphones and tablets. Nintendo needs to swallow its pride and get into hardcore gaming (which I suppose they are doing with the Wii U) and maybe develop a smartphone. Otherwise they're just going to get left in the dust.

 

[Callate]

That failure to meet expectations led to a drastic price cut that goosed 3DS sales but took a big bite out of the bottom line. On the upside, Iwata said the unit is now selling reasonably well and the company expects things to pick up even further in November with the release of "big titles" for the holidays. The Wii also appears to be picking up the pace.

The unit is selling reasonably well... at a loss.

The company that had everyone else scuttling to get some of their magic (motion controllers, anyone?) seems to be having one long bad day.

It's kind of a pity. I'm rather fond of big N in their current incarnation, and I don't think either the 3DS or the Wii-U are inherently bad ideas (shame about the battery life of the former, though.) They just can't seem to click, though; people started becoming jaded or annoyed about 3D just as Nintendo pushed the 3DS out the door, and the press junket around the Wii-U was so mis-conceived many people weren't even clear if it was a new console or just a peripheral for the Wii. Then when people started getting clearer, the big question seemed to be:

"So, how many of these fancy new screen-controllers per unit?"
"Uh, one..."
"And everyone else-"
"Will be using pretty much the same old Wii controllers, yes."
"So, how is this a big step forward?"
"Well, the sheer horsepower slightly eclipses that of the current generation of consoles... Not that we've provided any previews that highlight that fact..."

I think N needs to produce their killer app for the 3DS (perhaps Mario will provide) and start making it clear that the Wii-U a) is attracting big-name, third-party AAA devs in a way the Wii never entirely succeeded in, and b) isn't going to become another junkyard of cheap toy-licenses and shooting gallery games like the Wii is becoming in its decline. The next gen wars are probably going to be decided in software, especially in the delay while Sony and Microsoft work to get their price-point right.

 

[For.I.Am.Mad]

As long as he apologized that's what matters.

 

[RaikuFA]

You know... Op. Rainfall still wants those games.

Hint, hint.

 

[Mahorfeus]

The 3DS is an excellent system in terms of technology and functionality, but the mainstay issue with it is its lackluster software library. Several Nintendo flagship titles were announced for it months before it was released, yet many of them are only just now starting to be released. A variety of decent third party titles were announced as well, and even those have been delayed substantially.

I think it suffices to say that Nintendo jumped the gun. Launch titles are always a deciding factor for determining whether to buy a system, and just like the Wii and DS before it, Nintendo failed to deliver any of its big guns at the point where it could have made the most profit. The upside is that once said titles do start to release, the low price point of the system will help sales substantially, especially during the holiday seasons. This is honestly the only edge it currently has over its main competition in the PS Vita, which for all intents and purposes, seems to have avoided the very mistake Nintendo made.

 

[Hungry Donner]

It will be unfortunate if the success of the Wii ultimately dooms Nintendo.

At the moment Nintendo gives me the impression that they don't know what they want but they'll steam ahead anyway. That's not the sort of thing that attracts investors.

 

[mjc0961]

I just really hope the WiiU launch is good with a great library of games coming out in a timely manner after launch. If they repeat the mistakes of the 3DS I am going to be really upset. One can only play Ocarina of Time 3D for so long!

Nintendo just need to accept that the game industry is changing. People just don't want the type of products they're selling anymore. People either want hardcore gaming at home like the 360 and PS3 and as for handheld and casual gaming, they'd rather play on their smartphones and tablets. Nintendo needs to swallow its pride and get into hardcore gaming (which I suppose they are doing with the Wii U) and maybe develop a smartphone. Otherwise they're just going to get left in the dust.

Contradict yourself much? You say they should go after the "hardcore" gamers, but then say they should make a smartphone which is not for "hardcore" gamers and also not a game platform at all. Good thing you're not in charge at Nintendo, otherwise they would have gone under by now.

 

[jurnag12]

I'm amazed that the Wii is still selling, almost anyone I know has one of those things.

I just really hope the WiiU launch is good with a great library of games coming out in a timely manner after launch. If they repeat the mistakes of the 3DS I am going to be really upset. One can only play Ocarina of Time 3D for so long!

Nintendo just need to accept that the game industry is changing. People just don't want the type of products they're selling anymore. People either want hardcore gaming at home like the 360 and PS3 and as for handheld and casual gaming, they'd rather play on their smartphones and tablets. Nintendo needs to swallow its pride and get into hardcore gaming (which I suppose they are doing with the Wii U) and maybe develop a smartphone. Otherwise they're just going to get left in the dust.

Contradict yourself much? You say they should go after the "hardcore" gamers, but then say they should make a smartphone which is not for "hardcore" gamers and also not a game platform at all. Good thing you're not in charge at Nintendo, otherwise they would have gone under by now.

I think he wasn't as much bipolar and contradictory as that he meant that Nintendo should stop chasing the motion-gaming crowd the way they have and focus on the 2 current trends, dividing their attention instead of focussing on just Hardcore gaming or smartphones.

 

[Frostbite3789]

As long as he apologized that's what matters.

Sarcasm? I really hope so. Because Molyneaux does this too. "Oops my bad, I goofed, but it'll get better." It doesn't get better.

 

[Xanthious]

Maybe they ought stop going through the N64 library and remaking N64 titles . . . .IN 3D!!!! Most of the games worth playing on the 3DS people have already played to death a decade and a half ago.

 

[AzrealMaximillion]

This is what happens when we don't get Mother 3 and Fatal Frame 4 Nintendo. Do you see what your region locking of awesome games has done?

 

[Treblaine]

"As the worldwide number of pre-orders indicated, the Nintendo 3DS had high expectations from consumers as well as market and industry players. However, the actual sales after the launch did not meet the expectations."

He should have known that the pre-order market is a rigged game.

People pre-order now for completely different reasons than as a microcasm interest of the wider market, but to get bonuses or just a hardcore loyalty. Wii changed their market when they pandered to the fickle mainstream with Wii, now pre-orders no longer represented a the thin end of the wedge of Nintendo's most loyal fans... they were Nintendos ONLY fans!

Also, it was a mistake to accume 3D was enough of a differentiating feature.

The people who do know tech, don't care about lenticular 3D.

The people who don't know, still think 3DS is just another iteration of regular DS like DS-lite, DSi or DSi XL.

Also: where are all the god damn games and why are they $40 each?!!?!?

You know why PSP is still selling better? Because it's piggy packing on PSN pricing of $15 for a nice small game. 3DS is for nice small games. I'm not going to pay $40 for a nice small game!

 

[kael013]

Since Nintendo seems to be in need of some advice right now: First release a normal console (like the 360 for example). You can add gimmicks like motion control or whatever you think of if you want, just make them a secondary feature. Second, [i/]release all those Japan exclusive games you've been hording over the years.[/i] Alternatively, if you want an immediate boost, just skip to phase 2. Either way, sales would skyrocket.

 

[KeyMaster45]

Don't apologize to us Iwata, we knew that your gravy train of sub-par hardware and tsunami of shovelware would crash like a heroine addict coming off a week long binge. It is going to take nothing less than Nintendo creating God's gift to gaming to bring back the audience you spurned with that smoldering heap of gimmicky crap you call a game console and your staunch refusal to bring the quality of your product/services to current standards.

*pulls the withered husk of Sega out of the closet* Look at this, is this what you want to become? Because that's exactly where you're heading at break neck speeds. One day you're going to wake up and find that all you've got left is your first party titles and an eternity to making shitty shadows of their former selves for peddling on once rival systems.

Let these losses be a wake up call for you Nintendo, get your head out of your ass. We miss you.

 

[GeorgW]

I'm getting some deja vu here...
I'm sure they'll see an unexpected boom in time for x-mas and everything'll be ok.

 

[Your Fearless Captain]

Nice to see that at least one video game company has some character left. Unlike some others I could name *cough cough Bethesda cough Activision cough*

 

[Fiz_The_Toaster]

Hey Nintendo, yo financials so ugly...
They make the Greek austerity measures look like GE's first quarter earnings for 2011!
Boom!

Aaaah snap!

OT: Maybe this will be a sign for them to actually act like the company that we knew and loved before the Wii.