Nintendo finances

The Kernel · Post by **The Kernel** » 2006-11-01 09:55pm

Vympel wrote:The Wii might get straight MGS2 and MGS3 in the same way the GameCube got the remade MGS, but it can't get MGS4. It wouldn't be able to cut the mustard, hardware wise. Though if there's a fishing mini-game in MGS4, the Wii will have that aspect totally cornered.

That'll be the case with all high-end games developed for X360 and PS3, for that matter.

This is an interesting point, because it raises one of the chief problems with the Wii design philosophy. The Gamecube, though somewhat underpowered, still easily met the "lowest common denominator" set by the PS2 for that generation of game consoles. Just about anything that was built for the PS2 could run on it, which meant relatively easy ports; developers were only limited by financial motivations to do so, not technical ones.

Faced with the idea of having to drastically cut major game elements in order to get them to function on the Wii, many developers are probably going to choose to skip the Wii entirely unless it meets a certain critical mass in the chosen market (highly unlikely, especially in the US) which means far less ports for the Wii.

Once again we see unarguable proof that despite protest from Nintendo fanatics that Nintendo would be catering to developers with the Wii, they are really just going further and further in the other direction. Nintendo has one plan with the Wii; to promote first and second party game titles, they seem completely uninterested in third party developers that are developing cross platform titles.

I've said it before and I'll say it again; Nintendo is a terrible influence on the games industry from a hardware perspective. They need to stick to what they are good at, which on the home console side is games. Their mobile division is still untouchable, but they are constantly losing traction in the home console market from generation to generation since the SNES and they should pull a Sega and abandon the hardware market entirely. The fact that Nintendo stockholders haven't insisted on such a move to this point is frankly shocking; Nintendo could be making truckloads more money if their titles were available either cross platform or for a platform with a larger influence.

Of course the smartest financial thing to do for Nintendo is to sell themselves to Microsoft who would pay a ridiculous sum for such a surefire entry into the Japanese market. Microsoft officials have even rumored that they've offered obscene amounts of money for Nintendo only to be turned down and once again it's amazing that the stockholders put up with such mismanagement.

DPDarkPrimus · Post by **DPDarkPrimus** » 2006-11-01 10:39pm

The Kernel wrote: Once again we see unarguable proof that despite protest from Nintendo fanatics that Nintendo would be catering to developers with the Wii, they are really just going further and further in the other direction. Nintendo has one plan with the Wii; to promote first and second party game titles, they seem completely uninterested in third party developers that are developing cross platform titles.

They don't want quickie ports. They want developers to fully focus on utilizing the features that set the Wii apart.

"OMG NINTENDO IS DOOOOOMED!"

Please.

Xisiqomelir · Post by **Xisiqomelir** » 2006-11-01 11:02pm

The Kernel wrote:Faced with the idea of having to drastically cut major game elements in order to get them to function on the Wii, many developers are probably going to choose to skip the Wii entirely unless it meets a certain critical mass in the chosen market (highly unlikely, especially in the US) which means far less ports for the Wii.

Once again we see unarguable proof that despite protest from Nintendo fanatics that Nintendo would be catering to developers with the Wii, they are really just going further and further in the other direction. Nintendo has one plan with the Wii; to promote first and second party game titles, they seem completely uninterested in third party developers that are developing cross platform titles.

Nintendo launch titles for the Wii: 5/39 (Excite Truck, Zelda, WarioWare, Wii Play, Wii Sports)

I've said it before and I'll say it again; Nintendo is a terrible influence on the games industry from a hardware perspective.

I don't even know what this means, to be honest. I have a sneaking suspicion it means "they're holding back progress!!!", but I'll ask you to clarify.

They need to stick to what they are good at, which on the home console side is games. Their mobile division is still untouchable, but they are constantly losing traction in the home console market from generation to generation since the SNES and they should pull a Sega and abandon the hardware market entirely. The fact that Nintendo stockholders haven't insisted on such a move to this point is frankly shocking; Nintendo could be making truckloads more money if their titles were available either cross platform or for a platform with a larger influence.

You know, this sounds a lot like "Apple should sell OS X for graybox PC hardware".

Of course the smartest financial thing to do for Nintendo is to sell themselves to Microsoft who would pay a ridiculous sum for such a surefire entry into the Japanese market. Microsoft officials have even rumored that they've offered obscene amounts of money for Nintendo only to be turned down and once again it's amazing that the stockholders put up with such mismanagement.

Are you crazy? Go from being a profitable company to being a subsidiary of a company with exactly one gaming "achievement", a hefty loss in the home console market?

Spanky The Dolphin · Post by **Spanky The Dolphin** » 2006-11-01 11:22pm

The Kernel wrote:Microsoft officials have even rumored that they've offered obscene amounts of money for Nintendo only to be turned down and once again it's amazing that the stockholders put up with such mismanagement.

The stockholders probably put up with it because Nintendo's stock has doubled in value since Summer 2004, the majority of that climb occuring within the last six months.

atg · Post by **atg** » 2006-11-01 11:30pm

The fact that Nintendo stockholders haven't insisted on such a move to this point is frankly shocking;

We'll there is, you know, the whole making a profit on the hardware thingy that may have swayed them. Obviously your business skills can overlook minor detail such as that. And as Spanky The Dolphin pointed out, their stock has gone up so they must be doing something right.

mizuno · Post by **mizuno** » 2006-11-02 12:21am

Nintendo is profitable because of its portable, the DS. Sony's PSP failed because they didn't understand that the console experience on a portable doesn't work very well while it looks like the Wii could be the same mistake in reverse. Do people really want to play small fast quirky games on a console? I don't know, we'll have to see.

I find it interesting that both Microsoft and Nintendo are trying to expand their audience, Nintendo by trying to attract non gamers and Microsoft by seeking out new markets in developing countries such as India and Africa. Sony.. nothing I know of, which is why I see their market share shrinking this generation

The Kernel · Post by **The Kernel** » 2006-11-02 12:28am

Xisiqomelir wrote: I don't even know what this means, to be honest. I have a sneaking suspicion it means "they're holding back progress!!!", but I'll ask you to clarify.

I wouldn't go that far, but I do think that the Wii is going to potentially create a great deal of schizophrenia among developers if it succeeds. Like it or not, there is an interest in general hardware parity among the games business.

You know, this sounds a lot like "Apple should sell OS X for graybox PC hardware".

Hardly, that's a totally unproven direction for Apple to take which would move them away from their core profitable business. Nintendo making games to sell on other platforms isn't a departure from anything.

Their hardware has always been a means to sell games, it isn't profitable in of itself.

Are you crazy? Go from being a profitable company to being a subsidiary of a company with exactly one gaming "achievement", a hefty loss in the home console market?

If Microsoft is willing to pay well above market rate for Nintendo and provide them with a platform to sell their games, what the hell do the stockholders care? You may have a point if the games divisions profitability had any significant impact on Microsoft's bottom line (it doesn't), or if Microsoft were a stock that wasn't considered gold on Wall Street (it is, and has consistantly been a performer even through bear markets).

From an investor perspective, if a merger gave you the opportunity to increase your investment 50% in a single transaction you'd be a fool not to take it.

The Kernel · Post by **The Kernel** » 2006-11-02 12:29am

Spanky The Dolphin wrote:
The Kernel wrote:Microsoft officials have even rumored that they've offered obscene amounts of money for Nintendo only to be turned down and once again it's amazing that the stockholders put up with such mismanagement.
The stockholders probably put up with it because Nintendo's stock has doubled in value since Summer 2004, the majority of that climb occuring within the last six months.

All of which due to the runaway success of the Gameboy. Just because a company has a winning division does not mean that another division isn't under performing, especially as a historical trend.

The Kernel · Post by **The Kernel** » 2006-11-02 12:32am

atg wrote:
The fact that Nintendo stockholders haven't insisted on such a move to this point is frankly shocking;
We'll there is, you know, the whole making a profit on the hardware thingy that may have swayed them. Obviously your business skills can overlook minor detail such as that. And as Spanky The Dolphin pointed out, their stock has gone up so they must be doing something right.

Making money on the hardware isn't nearly as important as you'd think; it is far more important to sell a lot of consoles so that you can sell more games, which is where the real money is.

If an average game bought 15 titles over the life of a console at $50 a pop, that's $750 in revenue. For that you can easily justify a hit to sell the console to the first few million, and let's not forget that even Microsoft and Sony consoles ARE profitable eventually, or at least sold at cost as the cost of the components decrease.

And the stock of Nintendo as I pointed out is due to the success of the Gameboy division, it really has little to do with the Gamecube.

Spanky The Dolphin · Post by **Spanky The Dolphin** » 2006-11-02 12:38am

The Kernel wrote:
Spanky The Dolphin wrote:
The Kernel wrote:Microsoft officials have even rumored that they've offered obscene amounts of money for Nintendo only to be turned down and once again it's amazing that the stockholders put up with such mismanagement.
The stockholders probably put up with it because Nintendo's stock has doubled in value since Summer 2004, the majority of that climb occuring within the last six months.
All of which due to the runaway success of the Gameboy.

Actually, it's because of the burning success of the DS. But so what? Profit is profit. Nintendo seems to be running itself fine.

The Kernel · Post by **The Kernel** » 2006-11-02 12:48am

Spanky The Dolphin wrote:
The Kernel wrote:
Spanky The Dolphin wrote: The stockholders probably put up with it because Nintendo's stock has doubled in value since Summer 2004, the majority of that climb occuring within the last six months.
All of which due to the runaway success of the Gameboy.
Actually, it's because of the burning success of the DS. But so what? Profit is profit. Nintendo seems to be running itself fine.

By "Gameboy" I was referring to the whole portable division, although the DS hasn't been selling as well as hoped (no where near the GBA incarnations).

But you are missing the point. Do you think that the Gameboy profits will go away because of a Microsoft acquisition? Microsoft isn't going to touch a winning division, they would focus on making the home games division perform better.

To put this in perspective assuming this (note, these are totally made up numbers):

Div A: $500 million a year profit
Div B: $20 million a year profit

After acquisition:

Div A; $500 million a year profit
Div B: $100 million a year profit

How does this concept make the Nintendo stockholders losers on this? Take the money they would make on a premium stock purchase, and add the fact that Microsoft could give them better profitability in one division and you have a winning sale.

It amazes me that people don't seem to understand that a corporation is about making money. If you have an argument that suggests that such an acquisition wouldn't make money, I'd be glad to hear it, but so far all you are arguing is that Nintendo doesn't need to make more money because they are already making money. Do I need to explain to you why this is not how it works?

EDIT: To expand on this, you DO realize that profitable companies are bought all the time right? If a company is profitable that doesn't necessarily mean it is a bad purchase for either side.

DPDarkPrimus · Post by **DPDarkPrimus** » 2006-11-02 12:56am

The Kernel wrote: By "Gameboy" I was referring to the whole portable division, although the DS hasn't been selling as well as hoped (no where near the GBA incarnations).

Okay. Now we know you're just a Nintendo-hating idiot.

Please explain to me how 26.82 million units (as of September 30th) is "less than they hoped".

The Kernel · Post by **The Kernel** » 2006-11-02 01:01am

DPDarkPrimus wrote:
The Kernel wrote: By "Gameboy" I was referring to the whole portable division, although the DS hasn't been selling as well as hoped (no where near the GBA incarnations).
Okay. Now we know you're just a Nintendo-hating idiot.

Please explain to me how 20 million+ units by the end of this year is "less than they hope".

Oh please, I point out the fact that the DS hasn't sold as well as the GBA and you come back with this shit?

The GBA was the best selling console of all time. It has sold over 76 million units thus far, that's more than the fucking NES sold. The DS has sold very well, but that doesn't mean it has lived up to the bar set by its predecessor. No where did I EVER suggest the DS was a failure.

I don't entirely blame Nintendo for this though, the GBA incarnations still sell extremely well and it seems to be more a factor of their old console being "good enough" for most people.

DPDarkPrimus · Post by **DPDarkPrimus** » 2006-11-02 01:05am

The Kernel wrote:
DPDarkPrimus wrote:
The Kernel wrote: By "Gameboy" I was referring to the whole portable division, although the DS hasn't been selling as well as hoped (no where near the GBA incarnations).
Okay. Now we know you're just a Nintendo-hating idiot.

Please explain to me how 20 million+ units by the end of this year is "less than they hope".
Oh please, I point out the fact that the DS hasn't sold as well as the GBA and you come back with this shit?

The GBA was the best selling console of all time. It has sold over 76 million units thus far, that's more than the fucking NES sold. The DS has sold very well, but that doesn't mean it has lived up to the bar set by its predecessor. No where did I EVER suggest the DS was a failure.

I don't entirely blame Nintendo for this though, the GBA incarnations still sell extremely well and it seems to be more a factor of their old console being "good enough" for most people.

You said it's "sold less than they've hoped". I called you on that, and this is what you come back with? The GBA has been out for three and a half years more than the DS. And the DS has sold... approximately one-third as many units as the GBA. Looks like it's "living up to the bar" JUST FINE, dumbass.

You can't claim the DS is not selling well, period. It's the first Nintendo console to ever sell out in Japan, it's the fastest-selling console in Japan period, and while it ran neck in neck with the PSP in the US up until recently, it has consistantly move more than double the units of the second-best-selling console in Japan- and that means ALL consoles, handheld or otherwise.

Console sales in Japan so far this year (as of 10-08):

1. DS Lite 4,983,903
2. PlayStation 2 1,127,143
3. PSP 1,381,966
4. Xbox360 80,354
5. GBASP 201,864
6. GBM 125,958
7. GC 66,671
8. DS 955,644
9. GBA 3,117
10. Xbox 168

The Kernel · Post by **The Kernel** » 2006-11-02 01:08am

DPDarkPrimus wrote: You said it's "sold less than they've hoped". I called you on that, and this is what you come back with? The GBA has been out for three and a half years more than the DS. And the DS has sold... approximately one-third as many units as the GBA. Looks like it's "living up to the bar" JUST FINE, dumbass.

Because of course consoles sell consistently well over the course of their lifetime.

Where do you come up with this red herring bullshit?

Where did I say that the DS isn't selling "just fine"? I'm comparing it to the GBA where it hasn't performed as well. And if you'd bother to look at the breakdown of units sold you'd know why: the DS has sold incredibly in Japan (better than the GBA did), but it hasn't fared nearly as well in the US.

None of this by the way is a problem for Nintendo's portable division. Where DS sales have been "softer", they have been selling tons of GBA, GBA SP and even GBA Micros in addition to GBA games. This certainly isn't a reflection of the health of the Nintendo mobile division which seems to be where you think I'm going with this, whereas I'm quite well aware that the Gameboy division is better then it has ever been.

DPDarkPrimus · Post by **DPDarkPrimus** » 2006-11-02 01:12am

The Kernel wrote: Where did I say that the DS isn't selling "just fine"? I'm comparing it to the GBA where it hasn't performed as well. And if you'd bother to look at the breakdown of units sold you'd know why: the DS has sold incredibly in Japan (better than the GBA did), but it hasn't fared nearly as well in the US.

Sure, it's only slightly outsold the PSP consistantly... up until recently, where it's had a healthier lead.

You still have yet to show anything to back up this rediculous claim of yours that the DS is somehow not living up to Nintendo's expectations.

None of this by the way is a problem for Nintendo's portable division. Where DS sales have been "softer", they have been selling tons of GBA, GBA SP and even GBA Micros in addition to GBA games.

I feel obligated to point out that the GBA sales you've quoted INCLUDE GBA SP and Micro sales.

This certainly isn't a reflection of the health of the Nintendo mobile division which seems to be where you think I'm going with this, whereas I'm quite well aware that the Gameboy division is better then it has ever been.

So well they've decided not to do any more incarnations of the Gameboy, and instead focus solely on the DS. The DS has gone from being "the third pillar" to the future of Nintendo handheld.

The Kernel · Post by **The Kernel** » 2006-11-02 01:19am

DPDarkPrimus wrote:
The Kernel wrote: Where did I say that the DS isn't selling "just fine"? I'm comparing it to the GBA where it hasn't performed as well. And if you'd bother to look at the breakdown of units sold you'd know why: the DS has sold incredibly in Japan (better than the GBA did), but it hasn't fared nearly as well in the US.
Sure, it's only slightly outsold the PSP consistantly... up until recently, where it's had a healthier lead.

You still have yet to show anything to back up this rediculous claim of yours that the DS is somehow not living up to Nintendo's expectations.

Why the fuck are you bringing up the PSP? What the hell does this have to do with anything? What does the DS outperforming the PSP have to do with anything?

The DS didn't live up to the sales numbers of its predecessor. Period. Nintendo was expecting sales to shift far more heavily into DS sales, but they were surprised by the fact that the GBA market remained strong, which naturally was stealing some sales away from the DS. This isn't a bad thing and it certainly didn't make anyone at Nintendo unhappy (all the money goes to the same place), but it does mean that the DS isn't selling as well as they expected in the US, where it has had much of its potential sales cannibalized by the GBA, which was not the case in Japan.

How do I know it has been selling below expectations? Because the US is the biggest market for portable gaming (gaming in general actually) and while the GBA in the US had tremendous sales numbers on par with Japan's adoption, they DS didn't sell nearly as well as Japan if you look at the adoption rates for the GBA.

To put it another way, the ratio of GBA to DS sold was greater than 1:1 in favor of the DS, whereas in the US it was reversed. Is that clear enough for you?

The Kernel · Post by **The Kernel** » 2006-11-02 01:23am

DPDarkPrimus wrote: I feel obligated to point out that the GBA sales you've quoted INCLUDE GBA SP and Micro sales.

SO FUCKING WHAT? That's a bullshit red herring; a repackaging does not mean it's a new platform.

If I include the mini-PS2 sales in the numbers of PS2's sold are you going to bitch because they are a different packaging? Piss off.

So well they've decided not to do any more incarnations of the Gameboy, and instead focus solely on the DS. The DS has gone from being "the third pillar" to the future of Nintendo handheld.

Sure, they are trying to push it. But that doesn't mean squat; GBA development is still alive and exceptionally healthy, and it doesn't mean that the cannibalization of DS units sold for GBAs is gone yet.

Spanky The Dolphin · Post by **Spanky The Dolphin** » 2006-11-02 01:23am

How do I know it has been selling below expectations?

Can you provide proof of numbers regarding what Nintendo's sales expectations were regarding the DS and DS Lite?

atg · Post by **atg** » 2006-11-02 01:24am

Why the fuck are you bringing up the PSP? What the hell does this have to do with anything? What does the DS outperforming the PSP have to do with anything?

So outselling your main competitor doesn't have anything to do with business expectations now does it?

The Kernel · Post by **The Kernel** » 2006-11-02 01:26am

Spanky The Dolphin wrote:
How do I know it has been selling below expectations?
Can you provide proof of numbers regarding what Nintendo's sales expectations were regarding the DS and DS Lite?

Did you read my previous post? The ratio of units sold was soft in the US. This is indisputable.

Spanky The Dolphin · Post by **Spanky The Dolphin** » 2006-11-02 01:29am

That doesn't answer my question.

The Kernel · Post by **The Kernel** » 2006-11-02 01:29am

atg wrote:
Why the fuck are you bringing up the PSP? What the hell does this have to do with anything? What does the DS outperforming the PSP have to do with anything?
So outselling your main competitor doesn't have anything to do with business expectations now does it?

If the PSP sold five million units and the DS sold eight in its lifetime, would you consider this positive? It's irrelevent to the point that DS success is measured against its predecessor, not against the competition.

If Sony demonstrates the ability to seriously make inroads into potential Gameboy sales, then it will be a factor (although not a sales target). Until then, the PSP sales are only relevant to the argument of success versus the PSP, not the overall success of the product.

The Kernel · Post by **The Kernel** » 2006-11-02 01:31am

Spanky The Dolphin wrote:That doesn't answer my question.

Can you not connect A to B? If Nintendo sees the DS outselling the GBA in one market, why are they going to assume it will undersell the GBA in another market (in which the GBA was the biggest success)?

I'm sure that they won't admit it underperformed expectations, but the numbers speak for themselves.

Now I have to ask, what the hell is the point of this bullshit tangent? Are you trying to prove something other than a semantic appraisal of Nintendo's fortunes might be disputable?

DPDarkPrimus · Post by **DPDarkPrimus** » 2006-11-02 01:32am

The Kernel wrote: The DS didn't live up to the sales numbers of its predecessor. Period.

I would believe this statement if you could provide the sales numbers of the GBA after it was out for two years.

Nintendo was expecting sales to shift far more heavily into DS sales, but they were surprised by the fact that the GBA market remained strong, which naturally was stealing some sales away from the DS.

Nintendo originally marketed the DS as "the third pillar" of the company, the other two being the GBA and the GC, of course. They announced recently that they've decided not to do another incarnation of the Game Boy, and focus on the DS. Why would they do this, if sales have been less than they expected?

This isn't a bad thing and it certainly didn't make anyone at Nintendo unhappy (all the money goes to the same place), but it does mean that the DS isn't selling as well as they expected in the US, where it has had much of its potential sales cannibalized by the GBA, which was not the case in Japan.

You know where we are Kernel, so you shouldn't be suprised that I'm going to have to ask you for proof of that.

How do I know it has been selling below expectations? Because the US is the biggest market for portable gaming (gaming in general actually) and while the GBA in the US had tremendous sales numbers on par with Japan's adoption, they DS didn't sell nearly as well as Japan if you look at the adoption rates for the GBA.

The DS is the fastest-selling console EVER in Japan. This fact contradicts your statement.

To put it another way, the ratio of GBA to DS sold was greater than 1:1 in favor of the DS, whereas in the US it was reversed. Is that clear enough for you?

As I've already said, the DS has become the fastest-selling console in Japan, and it's the first Nintendo console to ever sell out. Reality seems to be conflicting with your so-called "proofs".