Nintendo reports first-ever annual loss, projects profitable new year
theverge.com
theverge.com
Anyway, the important thing I told them was to not hold on to that stock for more than 2 years because the Wii would fail spectacularly when HDTV's had better adoption rates. I was a bit off on that prediction (nintendo stock took a bit longer to tank), but it seemed so obvious that the Wii would not be able to compete long-term.
I did not predict Apple destroying their handheld marketshare, but neither did the rest of the market. What amazes me about Nintendo is that they felt the Wii could be profitable for so long. I've always looked at the Wii as a defensive maneuver, it was just a device to give the company a shot at following it up with something really great. Since that has yet to happen, I don't think they are even capable of competing in the new market anymore. I have zero confidence that they can compete with Apple or Sony/MS.
The only thing Nintendo has going for them is their IP. I would not be surprised if we start seeing Mario and Link on some iOS title in a couple years. The WiiU will be as successful as the 3DS and everything to follow will be in steady decline. The world is going to move to iOS/Android/windows phone for mobile gaming and pay <$10 for games. Sony and MS are going to own on the game consoles. I just don't see a place for nintendo anymore.
The console may change, is already changing, to be just a dedicated entertainment box hooked up to your TV.
Split screen Minecraft on the Wii? What?
I remember when the Wii was shown at E3 2005--lines were HUGE. You had to wait for hours to get a glimpse of it. Whereas, nobody paid much attention to the Wii U.
Combined with Apple (and Facebook) completely disrupting the games business--I don't think it bodes well for Nintendo (or Sony, or Microsoft) in 2013.
I'm sure they are rushing to get the new system ready and when they do it'll be back onto the gravy train for Nintendo.
The Wii showed no sign of slowing due a lack of HD. It seemed to slow simply because it was an unexpected and wholly unprecedented mainstream success whose sales were simply not sustainable. It was always going to taper off and it's possible some of Nintendo's loss is attributable to not curtailing manufacturing quickly enough and having too much inventory.
But the loss story seems to be primarily a mobile one. Nintendo took a PS3-like approach with the 3DS, approaching a newly competitive landscape by trying to bury the competition with advanced technology. And, much like Sony, advanced technology alone wasn't enough to pull in consumers at higher prices. Things are definitely looking up as they've gotten more quality software onto the platform and prices have dropped.
But were I a stockholder I would be nervous about their plan to cut the 3DS price below-cost. Customers are ever-more price conscious with hand-held software and expecting revenue from $30+ mobile titles to make up for a loss on hardware is perhaps not a wise strategy. One would hope their manufacturing advances and thus cost cuts are not far behind the promised price cuts.
Similarly, the Wii U finds itself in a very different competitive landscape. It may well make Nintendo a solid profit even if it never achieves the breakout success of the Wii. But it may not start strong out of the gate, if the launch software can't make a compelling case for the technology. It's first-year profits may not be enough to offset another bad year from the 3DS.
I've not "yet" seen the signs that they are adjusting to this model on their next console. The one area they may be able to focus on that's not taken care of at the moment is the party/family type games that made the Wii so successful.
Nintendo is a very old company that has altered it's business many times, so there's not reason to believe they won't change themselves again.
Plus I've seen talk of increasing mobile game prices to offset the increasing production costs.
When we see a game of the production and complexity level of Modern Warfare 3, Battlefield 3, or Skyrim with a retail price of $3.99, only then will Nintendo fear for their console sales.
Admittedly the Wii did have AAA games in it's own right (Mario Galaxy 1 & 2, Zelda, Metroid), but these appeal to a very different demographic. The games that really made the Wii successful were Wii Sports (45 million sales), Wii Play (23 million sales) and Wii Fit (18 million sales).
How many Wii's did Nintendo sell at Christmas time every year on the basis of Wii Sports or Wii Fit alone? How many of these are now collecting dust under televisions with no additional software purchased for them? The major thing Nintendo got right last time was not making a loss on their hardware.
But I have to say I agree with every statement you made about Nintendo. Everything you said is true. Therefore Nintendo did exactly what they set out to do, to make a profitable and successful console. This makes Nintendo a failure how?
Most of the people I see who complain about the lack of software on the Wii are most likely not Nintendo's market. I have a Wii and my two daughters will happily play it whenever we let them, which would be every day if we didn't restrict it a bit.
The problem they may have with supposed lackluster interest in their console is when they release the WiiU. The question is whether people who are unhappy with their Wii will update to the WiiU. I can't say for sure whether I will or not. But people said the same thing with the GameCube to the introduction of the Wii.
Not directed totally at you, but in my experience most naysayers have no idea what they are talking about.
I'm not a Nintendo naysayer at all or suggesting impending doom for them either. I have every Nintendo console going back to the NES with a large catalog of (much loved) games on each.
I wasn't saying MW3 for 3.99 on the Wii (or any other platform). I was more saying the market for MW3 doesn't/didn't exist on the Wii (almost at any price point). High value console games will be around for some time yet, this just isn't Nintendo's marketplace, nor has it been for sometime. Big blockbusters will still sell, just only on non-Nintendo platforms.
Nintendo had a great strategy (red ocean/blue ocean) with the Wii that paid off greatly. It feels a little like their blue ocean isn't really there anymore. I see all the kids now sitting around playing Angry Birds on iDevices and it just feels that with the European/US economy in it's current state, parents are more likely to fill their kids on $2 purchases rather than $20-$30 ones. Especially when there will be a $200-$300 barrier to entry as well.
Nintendo will succeed in their homeland, they always will - I just wonder if they will do so well in other territories in the next couple of years.
I was once what you'd consider a die-hard Nintendo fan, but like a Blackberry user, one day you have to shed the melon collie and realize you're endorsing a company that can't pivot.
Nintendo makes a tiny few good titles and they endlessly resell their back catalog.
Nonetheless, I would imagine there are an awful lot of (older) gamers for whom the retail price of the game is basically irrelevant compared to even one hour spent playing it. Bluntly, I want an excellent quality game that is going to richly reward the time I spend in it and I couldn't give a shit how much it costs. Doubly so when it comes to my family. Hopefully Nintendo (and the other console manufacturers) continue to cater to us!