Nintendo lost half a billion dollars last year

[JackFetch]

Nintendo continues to lose incredible sums of money, even as the company's new portable dominates the Japanese market and its reported losses were less than its previous estimates. For the 2011 fiscal year (April 2011 through March 2012), Nintendo posted a historic first-ever net loss of $530 million dollars.

Hardware sales didn't quite hit Nintendo's estimates posted just three months prior, which were themselves revised downward from previous expectations. Globally the Nintendo 3DS sold 13.51 million units, Wii sold 9.84 million units and the DS 'family' sold 5.1 million units. Previous estimates were 14 million 3DSs, 10 million Wiis and 5.5 million units DSs. Software sales for the year were 36 million, 102.37 million and 60.82 million units respectively (3DS, Wii and DS 'family').

Accompanying these results, Nintendo released this statement: "While [Nintendo] did post a loss for the recently completed fiscal year, the continuing momentum of the Nintendo 3DS and the global introduction of the highly-anticipated Wii U home console will drive the company back into profitability in the current year." In a separate release, the company forecast a net profit of $245 million for the upcoming year.

http://wii.ign.com/articles/122/1223811p1.html

[MaxPower]

The Wii was awesome and filled a niche outside of the PS3 and XBox, but now that they offer similar experiences, what is Wii's point of difference? And with the DS, how much better does it have to be to warrant people carrying that and a mobile? It's great for kids that don't have phones yet, but that's a small market.

If Sony weren't also losing money, Nintendo could be an interesting take over for it, based purely on the character library.

[KnightWing]

^I think that's what people have been saying, but it hasn't proven to be true yet. The 3DS is now doing insanely well in sales, despite the existence of iOS and Android products. Furthermore, Nintendo isn't quite the same as the other two companies in the way it deals with both its franchises and its hardware. The brilliance of Nintendo is the way they merge the hardware and software into one experience, usually because they specifically design every system to match games they've already planned out. Just because Sony has a Wii remote-like device and Xbox has a 3D camera doesn't mean that Nintendo can't still do things that are notable.

If anything, the reason that Nintendo lost money last year was because they had almost no notable Wii releases whatsoever and they botched the first few months of the 3DS's release. With the Wii U having the new tablet controller (which, unlike the Wii remote for the most part, actually has the potential to enhance hardcore gaming as well as casual), a likely 3DS redesign in the next year or two, and a slew of games for both platforms already confirmed for release before 2013, they'll be fine.

Sony is probably the one to worry about tanking first. Hell, Nintendo is more likely to buy Sony than the other way around.

[Guest]

Hell, Nintendo is more likely to buy Sony than the other way around.

What.

[JackFetch]

Sony tvs and movies think differently.

[KnightWing]

Hell, Nintendo is more likely to buy Sony than the other way around.

What.

Nintendo has an absolutely crazy amount of money in their war chest because they've been selling hundreds of millions of systems at a huge profit for years. The fact that they're selling the 3DS at a loss now is actually a huge deal because it's just not something they normally do. Seriously, even if you only look at the Wii systems sold in the last 5 years, the numbers are absolutely staggering. A $250 price versus something like a $60 manufacturing cost. Sony, on the other hand, is known for basically breaking even at best. The company grows in size, but they don't have as much spare cash lying around from all the profits they haven't been making. Nintendo took a loss last year, but it wasn't ultimately that devastating because they had padding. Sony doesn't have that luxury, so every time they've been hit over the last several years it's been bad.

To clarify, I wasn't saying Nintendo would be buying Sony outright right now. I meant that if Sony keeps going the way it's been going for the last 5 years, it'll be in a worse place than Nintendo. And theoretically Nintendo could then buy them. But they probably wouldn't want to anyway; it's not their schtick.

[JackFetch]

Sony makes most of it's money from other sources besides gaming, which is why Nintendo could never buy them.

[dc20willsave]

Part of why I'm rooting for Nintendo to climb through this is because of the Big Three, they're the only one who is strictly in gaming. Sony and Microsoft both have Parent Companies who have huge holdings elsewhere. If the Playstation or XBox ever just implode, then oh well. If Nintendo ever goes under then that's it for them. There's no bailing out.

[Guest]

Nintendo's assets are a mere fraction of Sony's and they're one bad console generation away from making iPhone games.

They sold Gamecubes at a loss.

[JackFetch]

Honestly, I don't know why they don't make iPhone games. They would make a killing selling legit copies of old NES games that a lot of people pirate and use emulators to play. It would be a revenue stream they don't currently have, and Apple would be all over it.

[KnightWing]

Sony makes most of it's money from other sources besides gaming, which is why Nintendo could never buy them.

They make 50% of their profits from Playstation. So, basically, their company now lives and dies based on that brand.

Nintendo's assets are a mere fraction of Sony's...

There's a lot more going on than that. Nintendo's market value passed Sony's back in 2007; they're the equivalent of Apple over there. Basically, Sony is huge but their relative monetary power is weaker.

To further clarify: I don't actually think that either company will buy the other. Both are very very unlikely. But of the two, I do think that Nintendo>Sony is more likely.

[Guest]

Half of Sony's profits come from electronics.

Only about 10% of that is gaming.

[Molly]

Nintendo buying Sony is like Hardware Hank buying Wal-Mart.

[MaxPower]

Not to play devils advocate, but you could make an argument for Nintendo buying Sony's gaming division, if it ever on the off chance wanted to get out of gaming. It would never happen, but that would be the only way.

I love Jack's idea of Nintendo building games for phones, but some people would see that as a partial white flag maybe?

[SuaveStar]

I love Jack's idea of Nintendo building games for phones, but some people would see that as a partial white flag maybe?

Yip.

I would like Nintendo to actually have the games you bought on the Wii, be accesible on your 3DS/DSi, like Sony have with the PSP, as an extra feature. Right now, the list of virtual console games on the 3DS, are overpriced, and shit. Why would anyone want to pay £3.50 for an emulated version of a gameboy game, when you can get a full PS1 game on your PS3, and play it on your PSP for about £1 more?

[slothian]

Yowser. If you're an Extra Lives listener, you'd think I'd be on K-Dubs's side here. Can't say that I am.

I was a gamer thanks to Nintendo, and as alluded to by Will, I admire the fact that of the Big 3 (as it were), Nintendo are a video games company first, and any other money is made from game-related merch/misc. That being said, Nintendo would have to be killing the games market - in a good way - before the possibility of it taking over Sony's stake in the gaming market occured.

I don't pretend to understand much about business, economics or any such nonsense like that. What I do know is the Wii is about 6 years old, it's style (if not success) has been aped by Sony/Microsoft and it doesn't have a hugely mainstream software library. Add in the fact that the 3DS has mostly been hugely mishandled in terms of library & pricing, and it's not hard to see why Nintendo have struggled of late.

For nostalgic reasons, I hope the company rallies itself and continues to be a force in gaming for a good while yet, because as derided as it has been, no-one can argue the fact that the Wii has had an impact this generation. And it still dominates the handheld market, for as long as said market still exists before it's swallowed up by mobile gaming.