Nintendo cuts profits 33%.....get educated

[twenty1]

It's the end of the Wii.

Even Nintendo gets the blues, judging from the Wii-maker's latest counterintuitive financial announcement. In a shock reversal, the company has inexplicably slashed its full-year profit forecasts by 33 percent.

That certainly doesn't appear to jibe with sales figures, which peg Nintendo's hardware and software sales at second-to-none levels during most of 2008. Nintendo's third-quarter results alone were up 21 percent over the same period in 2007.

According to Times Online, analysts are describing Nintendo's move as a "baffling and potentially very worrying" sign for worldwide Wii sales.

Blame it on the recession?

Maybe, maybe not.

"Today's revision suggests that the roaring pace of Wii growth that we've seen until now may be over," said Hiroshi Kamide, a KBC Financial Products analyst.

Kamide says the reduction may imply that Nintendo knows "something big has gone wrong, and that people are not buying the machines."

Not buying the machines? Were the four million Wii units sold in November and December in the U.S. alone just a hoax?

http://www.pcworld.com/article/158549/nintendo_baffles_market_cuts_profit_forecast_by_33.html

And just so I'm not called a Fanboy or something:

http://edition.cnn.com/2009/BUSINESS/01/29/sony.loss/

TOKYO, Japan (CNN) -- Sony blamed the global economic slowdown, increased competition and an appreciating yen for a 95 percent drop in third-quarter profits, as the company announced its results Thursday.

Customers check Sony's Bravia brand LCD TVs at an electronics shop in Tokyo, Japan.

Profits for the quarter, which ended December 31, fell from nearly 200 billion yen ($2.2 billion) in 2007 to about 10 billion yen ($110 million) in 2008.

Across the company, sales were down 25 percent, but electronics and games sales were especially hard hit.

Sales of games, including the company's popular PlayStation series, fell 32 percent over the year. Sales of electronics decreased by nearly 30 percent.

The appreciation of the yen also cut into profits.

A stronger yen makes Japanese products more expensive or forces companies to lower their profit margins to keep prices the same.

Last week, Sony warned that it will close out the fiscal year, which ends March 31, with an operating loss of 260 billion yen ($2.9 billion), its first in 14 years.

http://edition.cnn.com/2009/BUSINESS/01/29/sony.loss/

 

[captainff]

I'll find some links later but there has been a 33% drop in the global video games market that started in about November .. .. .. not just for Nintendo but for EVERY system. When I first read about it Nintendo were facing a 24% drop in sales (compared to that 33%). If they go, then all 3 systems face big problems.

On the plus side over 50% of ALL software sold last year was for either the Wii or DS.

 

[HankB]

It's the end of the Wii.
...
And just so I'm not called a Fanboy or something:

You're a Fanboy!

(or something. )

Just kidding.

A quick check of console availability:

Walmart - no stock on line - that's where we bought ours (in a store) just before the Christmas rush. Later on, they listed it as not sold in stores. I don't see that, but I also don't see a way to check store stock which is how I located one.

Tigerdirect - "ships today" bundled with Need for Speed and Logitech steering wheel for $389 US.

Newegg.com - Ships with a bunch of games - look like decent games too - for $515 US. :yikes:

People still bidding consoles up over $300 on ebay.

So, it looks like they're still selling what they can make.

Most likely, Nintendo is taking a very pessimistic projection on what the dollar vs. yen will do.

But it's more fun to speculate. It's well known that they've been putting a lot of money into R&D. I think they're getting ready to roll out their next console. This will be sold side by side with the Wii (as Sony does with PS2 and PS3) and the next will have HD, Blu-Ray, HDD, motion control and IOW be as PS3/360 killer. It will be backward compatible with the Wii, but if you want further backward compatibility, you will need to keep your Wii.

They can leverage Wii momentum before Wiis start piling up on shelves. They will execute this move now to take advantage of the downturn. That allows them to put further pressure on Sony and M'soft while they are already hit hard by the economy. Sales for the new console will be slow, but that gives Nintendo time to establish the brand and ramp up production. (IOW, build value during the down turn and build volume when the recovery starts.) It's an unorthodox move, but Nintendo management has shown they are capable of thinking out of the box.

Oh, yeah... the new Zelda will be bundled with the first 5 million consoles sold.

Remember, you heard it here first!

 

[HankB]

I'll find some links later but there has been a 33% drop in the global video games market that started in about November .. .. .. not just for Nintendo but for EVERY system. When I first read about it Nintendo were facing a 24% drop in sales (compared to that 33%). If they go, then all 3 systems face big problems.

I prefer my fantasy to your reality! :lol:

 

[twenty1]

You're a Fanboy!

(or something. )

Just kidding.

A quick check of console availability:

Walmart - no stock on line - that's where we bought ours (in a store) just before the Christmas rush. Later on, they listed it as not sold in stores. I don't see that, but I also don't see a way to check store stock which is how I located one.

Tigerdirect - "ships today" bundled with Need for Speed and Logitech steering wheel for $389 US.

Newegg.com - Ships with a bunch of games - look like decent games too - for $515 US. :yikes:

People still bidding consoles up over $300 on ebay.

So, it looks like they're still selling what they can make.

Most likely, Nintendo is taking a very pessimistic projection on what the dollar vs. yen will do.

But it's more fun to speculate. It's well known that they've been putting a lot of money into R&D. I think they're getting ready to roll out their next console. This will be sold side by side with the Wii (as Sony does with PS2 and PS3) and the next will have HD, Blu-Ray, HDD, motion control and IOW be as PS3/360 killer. It will be backward compatible with the Wii, but if you want further backward compatibility, you will need to keep your Wii.

They can leverage Wii momentum before Wiis start piling up on shelves. They will execute this move now to take advantage of the downturn. That allows them to put further pressure on Sony and M'soft while they are already hit hard by the economy. Sales for the new console will be slow, but that gives Nintendo time to establish the brand and ramp up production. (IOW, build value during the down turn and build volume when the recovery starts.) It's an unorthodox move, but Nintendo management has shown they are capable of thinking out of the box.

Oh, yeah... the new Zelda will be bundled with the first 5 million consoles sold.

Remember, you heard it here first!

LOL.............THIS IS WHY I START THESE DEBATES......TO GET THE BRAIN THINKING..................OUTSIDE THE BOX!!!!!!!!!!!!!

great post

 

[captainff]

From the original article

One big source of margin destruction has been the soaring yen, which rose 24 per cent against the dollar and 30 per cent against the euro in 2008.

The company will, in contrast with other Japanese consumer electronics makers, finish the year substantially in the black, the company said that it likely would close the current financial year ending March 31 with net income of about Y230 billion (£1.8 billion),

It could also be that Wii has reached it's natural saturation point, or that the software release schedule is not encouraging new converts.. .. .. ..