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Latest Nintendo results lay bare the company's financial woes
Latest Nintendo results lay bare the company's financial woes
January 29, 2014 | By Mike Rose

January 29, 2014 | By Mike Rose
More: Console/PC, Business/Marketing

Nintendo already warned earlier this month that its current fiscal situation was looking far worse than originally forecast. Today the company revealed to what extent these issues lie, releasing its third quarter results.

For the nine months ended December 31, 2013, Nintendo recorded revenues of 499.1 billion yen ($4.8 billion), down 8.1 percent year-over-year, and profits of 10.2 billion yen ($98.7 million), down 29.9 percent.

Note that regardless of the profits it is currently recording for the first nine months, Nintendo now estimates that it will incur losses for the full year. That's because the company expects sales to drastically decrease in the fourth fiscal quarter, "due to seasonal factors as the year-end sales season concludes."

The company said that Pokemon X & Y on Nintendo 3DS have now sold 11.61 million units since October, while Animal Crossing: New Leaf has sold 3.52 million units worldwide during this fiscal year.

Elsewhere, Mario & Luigi: Dream Team has managed 2 million units sold worldwide, while The Legend of Zelda: A Link Between Worlds has seen 2.18 million sales.

Unfortunately, while 3DS hardware sales were strong in Japan, the handheld is seeing limited growth in overseas markets like the U.S. The handheld sold 11.65 million units in the first nine months of this fiscal year, and 57.25 million software units.

Onto the Wii U, and Nintendo sounded even more downtrodden, stating that it had "reached only 2.41 million" Wii U hardware units sold worldwide during these first nine months. This means the Wii U has now sold 5.86 million units to date.

The company was keen to note that The Legend of Zelda: The Wind Waker HD, Wii Party U and Super Mario 3D World have all sold over 1 million copies each, but this wasn't enough to help the Wii U recover.

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TC Weidner
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They need to invest in some new IP that is directed at young adults, and older gamers. They have gone to the well too often and now have a branding issue as they are seen as a kiddie game company.

Merc Hoffner
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Everyone said precisely the same thing ahead of the Wii, and the Gamecube, and during the N64. Nintendo posted profits the entire time, and dominated with the Wii, while simultaneously broadening market demographics with many of the same franchises they promote today. Kinect is a direct result of Nintendo's past ability to hit old and young, male and female.

That's not to say you're wrong either. Perhaps their stalwart franchises aren't hitting those extended demographics anymore. But they need to make more universal franchises like Wii Sports, Wii Fit and Brain Training, not 'anti-kiddy' titles. It's poor strategy to try to compete with Sony on Sony's terms - they aren't Sony, and even Sony struggle to make it work fiscally.

E Zachary Knight
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I don't see anything wrong with making more traditional AAA fare. Nintendo recognizes the need too and that is why they have Bayonetta 2 coming as well as "X". I think they dropped the ball on the Wii with Operation Rainfall having to force their hand in releasing those kinds of games stateside.

Nintendo doesn't need to do much of the work themselves either. They can buy up a couple of midsize developers to focus on more traditional games that will be exclusive to the Wii U.

Harry Fields
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They have plenty of IP that can be revitalized. Never underestimate the value of nostalgia. I think they've just been to the Mario/Zelda well a little too much while ignoring others.

Bob Charone
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"now have a branding issue as they are seen as a kiddie game company."

That doesn't seem to be problem for Lego which profit margin is ridiculously higher than Nintendo.

The problem is kids have tablets with educational games, strategy games, and Minecraft, all which improve each dimension of intelligence and creativity and fine motor skill, it is a good investment for a parent (plus cheaper games)

Even kids themselves prefer such devices:
iPad 48%
Wii U 39%
iPod Touch 36%
iPad Mini 36%
iPhone 33%
computer 31%
Kinect 31%
other tablet 29%
3DS 29%

Harry Fields
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Dear Nintendo,
As a youngling, I grew up on your fare. As a young adult, I still enjoyed it. As a father, I enjoy playing it with the kids and by myself as a guilty pleasure. I've owned every one of your consoles but the WiiU. Given the precarious state your company is in, I've had to examine *why* I haven't purchased a WiiU. The reasons were astoundingly simple. One is easy to fix, but requires the intestinal fortitude to dip into cash reserves a little bit, The other, requires a little more of a time commitment and culture change.

But first thing, I'd like to see you do, Nintendo, is immediately and drastically reduce the price on WiiU. I'm not talking a 50$ cut; I'm talking fire sale at 149$ for the 32 GB SKU and phasing out the 8 GB SKU. Yes, you're likely taking a bath (though likely relatively small) on each unit at this cost. This move will be seen as crazy, desperate, ingenious, foolish, rash, etc. by various media outlets. That's a *good* thing, as it will invariably generate significant free buzz. Your system will become an immediate impulse buy for most.

The second thing is software and services. Contract if you must, form strategic partnerships, do whatever you have to but first, fix your online infrastructure. You don't need an XBL/PSN level network yet, but fix the game ownership accounting and friend list accounting methods to have a seamless experience across platforms. Focus on seamless first, extra functions second.

While you're doing this, farm out development of *dozens* of titles, small to big for your platform. EAD can only do so much. Metroid needs to be bi-annual. A new Earthbound for the big screen; a new Star Fox every two. Hell, revolutionize Ice Climber, Duck Hunt or Hogan's Alley for the new age. You have much more in your IP stable than Mario and Zelda; use it. There are many talented studios who would serve as excellent stewards of your IP. I know if I were to work on a Metroid title, I'd do everything in my power to make sure it lived up to expectations, given how influential the 8 and 16 bit versions of the game were on me growing up.

Nintendo, I assure you... You lower the price of your Wii U, fix the quirks of your network and get more than two quality titles out a year and I guarantee you will find endearment in the arms of core players and by extension, millions of others.

A fan


Ricardo Hernandez
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I read this and a big part of me can't help but agree, but sounds like it may not be as easy to do.

Terry Matthes
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I agree. They need to bring the types of games Rare made back badly. So much of their ancient core demographic has aged and subsequently moved away that Nintnedo doesn't strike excitement into the hearts of children and young adults as it used to.

When I was a kid Nintendo was a force of nature for god sakes and now it's a soft breeze. They have the resources and the talent. Jump on the X86 bandwagon with some reworked franchises and I'll bite hard.

At the same time why not look at adopting steam onto the system as well or is that crazy?