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Nintendo Losses Continue, But 3DS Now Profitable

Company struggling to gain footing after launch of 3DS.

What what seemed like a slam dunk for Nintendo has proved a difficult pivot for the company.

Nintendo will suffer a few days of rough headlines, as the company announced a quarterly loss of 17.23 billion yen ($220 million).

On the bright side? It’s less than Nintendo lost last year, and the 3DS is now apparently a profitable machine, as of today.

Nintendo has historically made money on each hardware unit sold, but with the drastic cost cutting actions taken last summer, Nintendo has been unable to rely on one of its financial constants.

The company sold 1.86 million 3DS units in the last quarter.

The next year will be extremely important to Nintendo, as the company moves toward the business of making money on the back of a profitable 3DS and the launch of the Wii U later this year.

Has it really been six years since the original Wii?

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Posted by TheSlothKing

@Heartagram: Iwata has said if they stop making consoles, they will stop making games.

Posted by JuggaloAcidman

I wish the WiiU had better graphics... I would be more excited about it if it did!

Online
Posted by BoFooQ

To be clear, I'm not playing games on my phone either. I play games at home on my big tv. If I get stuck in the DMV or something for hours I will play whatever thingie I find on my phone. I will not spend hundreds of dollars on some system I can never see myself using. My luck would be I would buy one and than whenever I would want it, it would be sitting at home, and there is no way I going to carry another thing around with me all the time.

Posted by Rolyatkcinmai

@BoFooQ said:

who are all these people buying 3DS's? I would love to see numbers sold in america and japan. I can't see myself ever buying a portable game system ever again, my phone is good enough for that.

You're a crazy person if you think those experiences are comparable.

Posted by Shaanyboi

@Turambar said:

@Shaanyboi said:

@Turambar said:

@SamDrugbringer said:

I'm sure someone else can explain this but... if the 3DS is making money... what exactly are they losing money on? Just R&D for the Wii U? Advertising and trade shows and getting ready to roll it out? I can't imagine they're LOSING money on the Wii since it must cost 10 bucks to make.

well, the article makes no real mention of just how recently the 3ds started making money, so it might not have really figured much into the quarter. Also yeah, R&D as well as just the general upkeep for running the company is sure to eat into it a lot. While I'm sure they're making money per Wii sold, Wii's aren't exactly selling much anymore. NDP numbers for March had it selling at half as much as the 360 and PS3.

It's making money as of today. Says so in the article.

I take that as a figure of speech, not statistics.

"Nintendo has been selling the 3DS at a loss since the post-launch price cuts, but the financial results report that as of July 25th it is no longer selling at less than the manufacturing price, meaning that the company can start making money from sales of the console from this point onwards."

Source

http://ca.ign.com/articles/2012/07/25/nintendo-still-losing-money-but-3ds-sales-improving
Posted by Krakn3Dfx

@BoFooQ said:

who are all these people buying 3DS's? I would love to see numbers sold in america and japan. I can't see myself ever buying a portable game system ever again, my phone is good enough for that.

When we were at Comic Con this year, it seemed like 1 out of every 5 people was holding a 3DS in line waiting for stuff. My son had 8 Street Passes on his 3DS before we got there, and he left with almost 300.

Edited by Curufinwe

@Rolyatkcinmai said:

@BoFooQ said:

who are all these people buying 3DS's? I would love to see numbers sold in america and japan. I can't see myself ever buying a portable game system ever again, my phone is good enough for that.

You're a crazy person if you think those experiences are comparable.

I don't have a commute but I love being able to play games on dedicated handhelds, usually in front of the TV. I'll be getting a 3DS XL next month to play Theatrhythm and eventually Shin Megami Tensei IV, and my wife will use it to play the new Animal Crossing.

And I'll use my iPhone for light web surfing, email and twitter.

Posted by Orbitz89

@BoFooQ said:

who are all these people buying 3DS's? I would love to see numbers sold in america and japan. I can't see myself ever buying a portable game system ever again, my phone is good enough for that.

I can understand the lack of interest in portable gaming, But I have to respectfully disagree with a "Phone being good enough" for playing games on the go.. I enjoy having Buttons, I don't enjoy playing games on a touch screen for a device that heats up ridiculously fast and makes my damn hands sweat, not to mention destroying the battery charge. I would say it's unfortunate that people are willing to live with phone games and the experience of playing games on them being crap because the games themselves are cheap.

Also, the iPhone and iPod are way too small for me and i'm not even a big guy, and the iPad is just unwieldy for playing anything.

Edited by Orbitz89

@Phoenix87 said:

Shitty companies deserve to fail and its sad indeed since I used to love Nintendo.

Shitty companies do indeed deserve to fail. So why the fuck is Sony still around? They constantly give me the impression their entire company is run by chimps and every device I've purchased from them is convoluted and just awkward in it's functionality.

Posted by iAmJohn

I just hope something I want to play comes out soon. It's been a pretty dead couple of months since Kid Icarus came out.

Posted by MAGZine

@Turambar said:

@SamDrugbringer said:

I'm sure someone else can explain this but... if the 3DS is making money... what exactly are they losing money on? Just R&D for the Wii U? Advertising and trade shows and getting ready to roll it out? I can't imagine they're LOSING money on the Wii since it must cost 10 bucks to make.

well, the article makes no real mention of just how recently the 3ds started making money, so it might not have really figured much into the quarter. Also yeah, R&D as well as just the general upkeep for running the company is sure to eat into it a lot. While I'm sure they're making money per Wii sold, Wii's aren't exactly selling much anymore. NDP numbers for March had it selling at half as much as the 360 and PS3.

-shrug-

I worked as a retail ambassador for Nintendo last holiday season. (These comments are fully my own, no association with employer, et all.) Nintendo is fully aware that they saturated the market for Wiis. The removal of the Gamecube emulation chip is pretty evident of it. They just wanted to make it cheaper to get those last few people onboard. It's hard to sell something when everyone who possibly wants one, has one. The Wii will not outpace the PS3 or 360 in sales for the rest of it's life... which is only a half-dozen more months, if Nintendo is to be believed.

Posted by Korolev

If nintendo bothered to create new IPs every once in a while, they wouldn't be in this mess - but they don't

Posted by Mirado

@Korolev said:

If nintendo bothered to create new IPs every once in a while, they wouldn't be in this mess - but they don't

What is "this mess"? Nintendo has nearly 820 billion Yen (or about $10.5 billion Dollars) banked up. They can take a loss this size twice a year for something like 20 years. I mean, this news isn't good, but people seem to forget just how gigantic Nintendo actually is.

I'd love to see new IPs myself, but with that much money in the bank you're looking at QUITE a few more Mario games before they create some panic IPs.

Posted by Tarsier

this is gonna sound controversial, but nintendo as a console maker deserves to die. and rot in hell, forever.

Posted by Lunar_Aura

@Hosstile17 said:

"It’s less than Nintendo lost year" Prolific.

I blame the fro. It forms words that should be there, but aren't.

Posted by joeshabadoo

So . . . why/how are people thinking that Nintendo has spent/lost all their Wii profits?! They have an absolutely ludicrous amount of cash reserves (liquid asset). These reports are only telling the story of what a company made vs what they spent in the last fiscal quarter/year. Lately, Nintendo have been spending more and earning less, due to various global currency factors, price drops, expected declining sales of their 6 year-old console, and new manufacturing.

They are in no real financial danger whatsoever. In fact, one might say they are ballin'

Posted by Wuddel

So the WII U will be the make or break I guess. My video game taste is probably oppsite from what is released on Nintendo consoles (except puzzle games, I would love to play picross someday), but I think they would be better of becoming a software company. Everyone knows Mario! If I had kids I would buy Nintendo games for them. But clutter the living room with yet another device which is terrible on the "media center" side of things? Not so much.

Edited by HerbieBug

The Wii U isn't going to help this slump. Nintendo has made a terrible miscalculation in their strategy. Pandering to casual household family use meanwhile turning your back on the core video game audience was never going to be profitable long term. They needed to give consumers a reason to purchase the Wuu over the new xbox or playstation. They didn't do it.

At this point I think Nintendo might want to bow out of the living room console market. Stick to software development and handhelds. Take some time out to recover.

Posted by McShank

@Orbitz89 said:

@BoFooQ said:

who are all these people buying 3DS's? I would love to see numbers sold in america and japan. I can't see myself ever buying a portable game system ever again, my phone is good enough for that.

I can understand the lack of interest in portable gaming, But I have to respectfully disagree with a "Phone being good enough" for playing games on the go.. I enjoy having Buttons, I don't enjoy playing games on a touch screen for a device that heats up ridiculously fast and makes my damn hands sweat, not to mention destroying the battery charge. I would say it's unfortunate that people are willing to live with phone games and the experience of playing games on them being crap because the games themselves are cheap.

Also, the iPhone and iPod are way too small for me and i'm not even a big guy, and the iPad is just unwieldy for playing anything.

I own every gameboy except the 3ds and the DS XL *because i have a lite and its awesome*. I love handhelds, I have almost as many gameboy games as ps3 and since they are handhelds they usually dont take as long to kick out the door for us to buy so there is usaually a Large quantity of games to play. My phone has nintendo, snes, gameboy color and advance on it with a ton of games but i honestly cant say id ever pick it over a gameboy.

Posted by cthomer5000

I would love to see a full article about the gamble Nintendo has taken with the 3DS and Wii U. It blew my mind when Pachter said they have effectively spend all the money they made on the Wii developing the new handheld and console.

Isn't the Wii U the most successful console ever? And if not the DS must be. How in the hell did they spend ALL that money doubling-down on the next gen and end up with both a handheld and console that have garnered such tepid responses?

Posted by cthomer5000

@Mirado said:

@Korolev said:

If nintendo bothered to create new IPs every once in a while, they wouldn't be in this mess - but they don't

What is "this mess"? Nintendo has nearly 820 billion Yen (or about $10.5 billion Dollars) banked up. They can take a loss this size twice a year for something like 20 years. I mean, this news isn't good, but people seem to forget just how gigantic Nintendo actually is.

I'd love to see new IPs myself, but with that much money in the bank you're looking at QUITE a few more Mario games before they create some panic IPs.

Aren't they publicly owned? Shareholders aren't going to sit back and watch them post huge losses for a continued period.

Posted by EXTomar

Most independent developer spend most if not all of the money they made on the last project to fund the next. It is a little shocking when a hardware vendor do it but over on the software side it happens all of the time.

Edited by awadnin

I hope Nintendo will focus on making a lot of great games for 3DS and WiiU because it is the easiest way to make money in my opinion.

Posted by El_Galant

I will be getting 3DS XL when Castlevania Mirror of Fate comes out...

Posted by Dalai

This year is oddly similar to 2006 during the transition from the Gamecube to the Wii. The pattern is there. 
 

  • Heavy focus on the handheld side resulting in growing DS sales in '06, boost in 3DS sales in '12.
  • Dead software period for the first halves of '06 and '12 on the home console side.
  • New home console for the holiday season.
The only thing we don't know yet is whether the Wii U will be the massive hit the Wii was or the Gamecube all over again.
Edited by Vegetable_Side_Dish
Posted by joeshabadoo

@cthomer5000: They DID NOT spend all of that Wii/DS profit. That is simply a false statement. They are sitting on one of the highest %s of operating income in their history. They are rolling in fat stacks. Pachter was sharing an OPINION on how he felt that they burnt through the brand equity/clout that they achieved with the Wii. That is at least partially true, but yet to be seen.

Recent operating loses do not mean that Nintendo are suddenly in debt and in danger of dissolving. They simply spent more than they made. It happens constantly in business for a variety of different reasons.

Posted by Palaeomerus

Nintendo's losses mainly come form the value of their foreign assets falling as currencies lose ground to the yen. It's not sales or R&D problems. It's not a lack of revenue. They invested their cash in stuff that has lost value as the economy in Europe and the US has sucked and sucked.

Edited by KaneRobot

@Mirado said:

@Korolev said:

If nintendo bothered to create new IPs every once in a while, they wouldn't be in this mess - but they don't

What is "this mess"? Nintendo has nearly 820 billion Yen (or about $10.5 billion Dollars) banked up. They can take a loss this size twice a year for something like 20 years. I mean, this news isn't good, but people seem to forget just how gigantic Nintendo actually is.

If Nintendo keeps losing money, they'll be lucky to get 5-6 years into that little 20 year formula you came up with. People in the position to not stand for it...won't.

They aren't going to keep losing money until they have none, they'll cut their losses and go the Sega route if the Wii U flops...which I'm guessing it will. Lightning won't strike twice.

Posted by Evercaptor

@KaneRobot: I hate to be an arse, but Nintendo is a veritable lightning rod; NES, SNES, GameBoy/Colour/Advance, DS Lite, Wii... But with that said, I would really like to see Nintendo make the transition to Multiplatform publisher.

Posted by jasondesante

put Nintendos full library from start to finish vs any other company's full library.

Posted by Phatmac

I thought cell phones were suppose kill handheld gaming right?

Posted by Arkasai

@Tarsier: Not that this matters much, but Nintendo did introduce virtually every meaningful innovation as far as game controllers go: joysticks, shoulder buttons, the D-pad, trigger(s), vibration, wireless connection, and everyone's favorite: waggle. With a history like that, I'm willing to see if they've still got it on this next console. But like most I'm betting against it.

Posted by Tarsier

@Arkasai said:

@Tarsier: Not that this matters much, but Nintendo did introduce virtually every meaningful innovation as far as game controllers go: joysticks, shoulder buttons, the D-pad, trigger(s), vibration, wireless connection, and everyone's favorite: waggle. With a history like that, I'm willing to see if they've still got it on this next console. But like most I'm betting against it.

yeah, nintendo has a great history. a history which is long gone, and is never coming back.

Posted by DeF

@Tarsier said:

@Arkasai said:

@Tarsier: Not that this matters much, but Nintendo did introduce virtually every meaningful innovation as far as game controllers go: joysticks, shoulder buttons, the D-pad, trigger(s), vibration, wireless connection, and everyone's favorite: waggle. With a history like that, I'm willing to see if they've still got it on this next console. But like most I'm betting against it.

yeah, nintendo has a great history. a history which is long gone, and is never coming back.

isn't that kinda a thing with history though? it's usually (100%-ish) in the past^^

so your comment = no sense it does make :P

Posted by Tarsier

@DeF said:

@Tarsier said:

@Arkasai said:

@Tarsier: Not that this matters much, but Nintendo did introduce virtually every meaningful innovation as far as game controllers go: joysticks, shoulder buttons, the D-pad, trigger(s), vibration, wireless connection, and everyone's favorite: waggle. With a history like that, I'm willing to see if they've still got it on this next console. But like most I'm betting against it.

yeah, nintendo has a great history. a history which is long gone, and is never coming back.

isn't that kinda a thing with history though? it's usually (100%-ish) in the past^^

so your comment = no sense it does make :P

lol it actually does make sense if youre not exclusively trying to dilute it with bowl shit

Posted by DeF

@Tarsier said:

@DeF said:

@Tarsier said:

@Arkasai said:

@Tarsier: Not that this matters much, but Nintendo did introduce virtually every meaningful innovation as far as game controllers go: joysticks, shoulder buttons, the D-pad, trigger(s), vibration, wireless connection, and everyone's favorite: waggle. With a history like that, I'm willing to see if they've still got it on this next console. But like most I'm betting against it.

yeah, nintendo has a great history. a history which is long gone, and is never coming back.

isn't that kinda a thing with history though? it's usually (100%-ish) in the past^^

so your comment = no sense it does make :P

lol it actually does make sense if youre not exclusively trying to dilute it with bowl shit

well if you say so

Posted by Tarsier

@DeF said:

@Tarsier said:

@DeF said:

@Tarsier said:

@Arkasai said:

@Tarsier: Not that this matters much, but Nintendo did introduce virtually every meaningful innovation as far as game controllers go: joysticks, shoulder buttons, the D-pad, trigger(s), vibration, wireless connection, and everyone's favorite: waggle. With a history like that, I'm willing to see if they've still got it on this next console. But like most I'm betting against it.

yeah, nintendo has a great history. a history which is long gone, and is never coming back.

isn't that kinda a thing with history though? it's usually (100%-ish) in the past^^

so your comment = no sense it does make :P

lol it actually does make sense if youre not exclusively trying to dilute it with bowl shit

well if you say so

lol, nice joke tho i guess

Posted by Video_Game_King

@OllyOxenFree said:

What what.