Nintendo Mulls New Business Model After Forecasting Loss

[onehandle]

Source: Bloomberg

Nintendo Co. President Satoru Iwata said the maker of video-game machines is considering a new business model after forecasting a surprise 25 billion-yen ($240 million) annual loss because of tepid demand for the Wii U.

Nintendo fell the most in more than 12 years in the U.S. yesterday. The company had previously projected profit of 55 billion yen for the year ending March as it counted on Christmas shoppers to revive sales of the Wii U console featuring games with iconic characters Mario and Zelda. Nintendo cut its forecasts for Wii U console sales to 2.8 million units from 9 million and for Wii U game sales to 19 million units from 38 million.

The family-focused content of Nintendo is losing its appeal as titles were delayed, casual gamers migrate to mobile devices, and hardcore players opt for the faster Sony PlayStation 4 and Microsoft Xbox One. The owner of Pokemon and Donkey Kong also refuses to offer games with its characters on mobile devices, limiting its ability to profit online players’ surging demand.

Read more: http://www.bloomberg.com/news/2014-01-17/nintendo-forecasts-net-loss-on-stagnating-sales-of-wii-u-games.html

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Long past time for them to port over to iOS. I would be a good customer.

[Shoulders of Giants]

1. Nintendo can keep the 3ds, but I don't see why they need their own living room console?

Last edited Sat Jan 18, 2014, 12:26 PM - Edit history (1)

There are almost no third party games for the system worth buying. All of the important games for the system (Mario, Zelda, Donkey Kong, etc) are all made by Nintendo themselves. Noone seems to care about the tablet controller, the way they cared about motion controls on the previous Wii. I'd rather they just put these games on the XBox or Playstation instead, so I don't have to spend 300 bucks just to be able to play Nintendo games.

[TekGryphon]

3. With Neverland (Rune Factory) closing its doors and Natsume indicating no Harvest Moon on Wii-U

My interest in ever getting a Wii-U has dropped down to 0.0%.

Nintendo did an abysmal job managing their 2nd and 3rd party relations.

[Shoulders of Giants]

9. I will get a Wii U eventually.

I am a video game enthusiast. I have over a dozen systems. Mario 3d Land looks absolutely amazing and I must have it. Some other games look good as well such the Zombi U and Yoshi epic Yarn. However, this is the least impressed I've been with a Nintendo system since the Virtual Boy (The only Nintendo system i didn't get). Most of Nintendo's own games don't use the tablet features, or just do the bare minimum. So why would the third parties do so, if even Nintendo gave up on its tablet? Most of the games would probably work mostly the same on the Microsoft of Sony game systems. I will get the Wii U eventually, because I must have everything. But I'll wait a couple of years for it to be in the bargain bin. My guess is most people won't though.

[AtheistCrusader]

4. And you can do the tablet thing with the xbox already.

Using Smartglass. I think PS has a rival concept too.

[TekGryphon]

2. Nintendo Direct was a truly arrogant and boneheaded marketing decision

Instead of putting out press releases and participating in the greater industry of journalism and expos, Nintendo decided they were going to implement an authoritarian marketing approach where the only information that was released came from a proprietary format through their own channels.

The results were predictable. General public awareness of Nintendo's developments went through the floor, to the point where the majority of Wii owners didn't even know wtf the Wii-U was.

Their arrogance continued with their approach to account management, 3rd party relations, and hardware configuration.

They deserve every dollar of that loss and I hope they replace Iwata, burn his ivory tower to the ground, and replace him with someone who isn't a xenophopic, authoritarian prick.

[loli phabay]

5. i have three Wii in the house, they are all basically netflix players now

with the xbox kinect being our games platform of choice.

[ZM90]

6. Not going to happen. Iwata is responsible for the success of the Wii, DS, and 3DS.

They are not going to throw away their CEO over a few missteps with the Wii U. As for Nintendo Directs they are fine they just need better advertisement. What if Nintendo did both the directs and every major gaming press event? I'm sure everybody would be satisfied with that. Iwata has actually been pretty humble if you ask me, the man has apologized for mistakes made repeatedly, and has admitted Nintendo has made mistakes.

Also Nintendo is NEVER going third party, and if they did their games would suffer in quality as their games are best on their own hardware. If they went third party that Nintendo Seal of Quality would mean less and less.

[TekGryphon]

7. I don't think you understand how dire the console situation is for Nintendo.

It's not a flop. It's an industry punishing flop. 3rd party publishers were already dissatisfied with their treatment in the Wii generation where Nintendo had zero quality control and good titles got lost in a flood of shovelware. With the Wii-U a complete failure and shelf space being abandoned, 3rd party developers are either committed to ignoring the Wii-U or, for those dependent on Nintendo, shutting their doors entirely.

Nintendo Direct isn't something that can be fixed. It's a culture problem that needs to be dragged outside, shot, and tossed in a ditch. It's a propaganda outlet for fanboys, much in the same way Fox News is for Republicans. It does NOTHING to reach the market.

[ZM90]

8. While I admit that the Wii U itself isn't exactly in a good situation to say Nintendo has gotten no

3rd party support is ridiculous. Let's list some examples of 3rd party Wii U games.

Assassin's Creed 3
Assassin's Creed 4
ZombiU
Bayonetta 2
The Wonderful 101
Sonic Lost World
Call of Duty Black Ops II
Call of Duty Ghosts
Monster Hunter 3 Ultimate

and that's just to name a few.

Wow...comparing Nintendo Direct to Fox News that is rich you are a funny person hahaha. Nintendo Direct is simply a way for Nintendo to inform their most loyal consumers about their upcoming games while Fox News is a propaganda outlet that lies to you. Nintendo Direct doesn't lie to you. You can't compare a fake news source to a outlet meant to inform you about a company's games.

As I said in my last post why not have all Nintendo going to all of the mainsteam gaming sources and still have their Nintendo Directs? I doubt it would hurt a thing.

As for the Wii U the system itself is fine it's problem is the fact that Nintendo didn't have any decent advertisement for the thing until recently, hell I heard of people that thought it was a addon. They still need more advertisement though, they need more commercials on mainstream TV channels.

I know you're probably going to sit there and call me a Fanboy when I own a Wii U, 3DS, PSP, PS3, and PC but whatever.

[TekGryphon]

15. That's an abysmal list this far after release and you know it.

I don't care what systems you own; the Wii is the only console in my house as we do all our gaming on Steam. You deserve the fan-boy title purely for saying the "Wii-U system is fine". It's an underpowered console with an underpowered gimmick controller with a dearth of games.

It's a failure of Dreamcast proportions with all of the Dreamcast's failings and little of its strengths.

The only thing holding Nintendo together right now is its handheld market and, as business organizations are pointing out, even that market is under siege with few positive prospects for the future: http://www.fool.com/investing/general/2014/01/18/apple-and-google-are-killing-nintendos-3ds.aspx

[ZM90]

17. Have you tried the Wii U? That so called "gimmick" is actually pretty nice.

I like being able to watch my TV and play my console games at the same time. While it is true that Microsoft and Sony have something similar only the Wii U does that right out of the box. The Wii U isn't going to be the smashing success the Wii was but it won't be a complete failure either, I suspect it will reach Gamecube level sales.

I also cannot believe you are hating on the Dreamcast that was a revolutionary console for it's time, key phrase "for it's time". I had a Dreamcast when I was a kid and I was playing Sonic Adventure and Phantasy Star Online on it.

LOL at Apple and Google killing the 3DS. The 3DS has sold 42.4 million total, I'd hardly call that "dead".

Also: http://www.vgchartz.com/game/73171/the-legend-of-zelda-a-link-between-worlds/
http://www.vgchartz.com/game/71449/pokemon-xy/
http://www.vgchartz.com/game/50395/super-mario-3d-land/
http://www.vgchartz.com/game/45691/mario-kart-7/

and this doesn't include the remakes of OoT3D or SF64 3D.

Also: I know this article is about a little over a year old but it's still pretty relevant http://www.gamesradar.com/nintendo-doomed-not-likely-just-take-look-how-much-money-its-got-bank/

[TekGryphon]

20. Who said the 3DS is dead? I simply pointed out that ...

Last edited Mon Jan 20, 2014, 10:32 AM - Edit history (1)

.. Nintendo failed to meet their sales projections for the 3DS by almost a third. That's a huge gap, and it's why their shares just nose-dived by almost 20%.

You're welcome to enjoy the Wiii U just as you're welcome to enjoy the Dreamcast. As I said, the Dreamcast had some strengths. In the end it was still a failed console and marked the end of Sega's console presence.

The reality is that Nintendo is in cascade failure.

They failed to recognize that the console market was moving to a unified hardware architecture with PC that allows developers to code for consoles and PC simultaneously. This alienates them from 3rd party developers now that Xbox One and PS4 are in the market, especially with dozens of Steam-boxes hitting the market this year which developers can easily adopt to from Steam, Xbox, or Playstation.

They failed to respect their consumers and, instead, implemented an antiquated and anti-customer region locking system that resulted in millions of loyal customers getting locked out of their favorite titles for absolutely no reason.

They have consistently failed across multiple systems to create a working account based online platform. This alienates them from both developers and gamers. It especially alienates them from loyal Nintendo fans who lose tons of money on virtual purchases when they experience a hardware failure or move to a new system.

They have failed and continue to fail in exercising even the most elementary of marketing concepts by insisting on pushing all of their marketing efforts through a channel that is only being consumed by a small fraction of their most loyal fans. This destroys their relations with the general market as well as pisses off game industry journalism channels.

What you see as a "setback" is being (correctly) recognized as a long string of failures finally reaching a critical mass that prevents long term (and possibly medium term) success. Nintendo could turn their sinking ship around by fixing these problems, but each of these problems represents a foundational pillar of Nintendo that will require a profound culture shift to fix.

[pothos]

10. uh oh

sounds like sega all over again

[Veilex]

11. Except Nintendo has been around long enough to build quite a bit of savings...

Nintendo is what I consider to be a legacy company... they've been around forever, and if they play their cards right, they can continue to be.

The fact that they're considering a change in direction shows that they're sloughing off their market myopia... which is a very good sign that they have a chance to grow back into the full fledged powerhouse status they once enjoyed. It will be a bit of an uphill trudge, but it can be done.

The most important take away here is that Nintendo is waking up to it's mistakes... which is something that cant be said for companies such as EA, Activision and to a lesser degree Ubisoft (though they seems to be making the change, slow as it is).

[ZM90]

12. +1,000,000 n/t.

[jmowreader]

13. Nintendo has a huge problem

The Wii has become a senior citizen exercise machine. Please don't laugh. Seniors LOVE the Wii; people who loved to bowl or fish when they were young but are now unable to pick up a bowling ball or get in a bass boat can play Wii and have fun. Every retirement home commercial has someone playing Wii in it. Doubtful the engineerss at Nintendo considered the needs of that demographic but too many products to mention started out as something besides what they are now.

The problem is that every senior citizen home has all the Wiis it needs, and as long as they still work they won't be replaced.

[K lib]

14. Build a better gaming console

one that can compete with PS4 and x-Box one with elements of the classic nintendo user interface. They still have cult followings for a lot of their games Mario, Zelda etc. I still have fond memories of playing games like Duck Hunt, Track and Field, and Mario.

[TekGryphon]

16. Not the answer

The industry has undergone a major change. The Xbox One, PS4, and PCs are all using the same fundamental architecture now. We have finally reached this stage and, now that we're here, no developer is going to tolerate sliding back into proprietary hardware configurations.

The Wii U will never have games because 3rd party developers do not want to develop for it now that the Xbox One and PS4 are out. They don't want to design for its proprietary, underpowered hardware architecture and its gimmick tablet when they can make a game and release it simultaneously on both major consoles and the PC.

[K lib]

18. that what i said

Nintendo needs to a console that competes with Xbox one and PS4, but they can still have some elements of their classic products just more updated to the times.

[Sen. Walter Sobchak]

19. There is a finite market for proprietary platforms of any type

In most product categories from handheld devices to super computers it has shaken out to two platforms.

[TekGryphon]

21. Close, but not quite accurate in this context.

In the handheld market we have Nintendo, Apple, and Google as 3 major players, with Sony as a moderate player and Windows as a minor.

In the console market we have Microsoft, Sony, and Steam as major players, Nintendo as a moderate player, and Google as a minor.

What you're going to find in the coming years is that the market is actually going to be able to support MORE consoles and handhelds thanks to unified hardware architecture standards. Developers will be able to make games that, with a weeks worth of tweaking, can be simotaniously released on PC, dozens of Steam-box variants, Xbox One, and Playstation 4.

Nintendo's problem is that they don't fit in that list because Iwata had his head stuck so far in the clouds that he couldn't read the memo on unified architecture. So he made the industry's last proprietary hardware configuration, made its primary interface a gimmick, and made it underpowered to boot.

[TekGryphon]

22. Region-locking alone is a good enough reason to wish Nintendo fails.

After Nintendo's incompetent management of their systems resulted in successful developers like Neverland shutting down and Natsumi abandoning their platforms on several IPs, millions of loyal customers are being locked out of titles because Nintendo is the last video game console manufacturer to insist on draconian region locking policies.

Screw Iwata. I hope he stays on board just so he can drive Nintendo fully into the ground and there can be doubt about his legacy.