Nintendo posts rare quarterly loss as sales sink over 25%

[dz06lt]

Nintendo posts rare quarterly loss as sales sink over 25% - News at GameSpot

Nintendo posts rare quarterly loss as sales sink over 25%

• By Tor Thorsen, GameSpot
• Posted Jul 29, 2010 2:12 am PT

After nearly four years of profits, the Mario Factory posts a rare $288.3 million loss; Wii sales near 74 million, DS tops 132 million; Super Mario Galaxy 2 goes quadruple platinum.
Ever since the Wii launched in November 2006, Nintendo has posted quarterly profit after quarterly profit.
No longer.
For the three months ending June 30, 2010, the company reported a rare loss of 25.2 billion yen ($288.3 million), versus a profit of 42.3 billion yen ($484.8 million) the year prior. Net revenues were 188.6 billion yen ($2.16 billion), a 25.6 percent decrease from the year before.

Super Mario Galaxy 2's 4 million in sales was a bright spot in Nintendo's dismal April-June quarter.


In a supplemental statement, Nintendo said that the reason for the decrease was falling sales of DS hardware and DS and Wii software. The strengthening yen was also a major factor, since it decreased the value of the Kyoto, Japan-based game giant's prodigious overseas income, which accounts for 86.5 percent of its overall sales. As a result, the company estimated its foreign exchange losses were 70.5 billion yen ($808 million), eating up most of its profits and pushing its ledgers into the red.
Contrary to many analyst reports, the company said global sales of its Wii hardware actually increased during the three-month period to 3.04 million, with 28.17 million Wii games purchased. The console has now sold 73.97 million units worldwide, far ahead of its rivals the PlayStation 3 and Xbox 360, with some 165 million Wii games sold as of June 30, 2010.
The DS has now eclipsed 132 million units of hardware sold, with a whopping 740.93 DS games sold internationally as of the end of June. However, Nintendo said "fewer new software titles contributed to driving hardware sales," so just 3.15 million members of the DS suite of portables were sold April-June period, along with 22.42 million games.
Nintendo also offered updates on some of its latest software releases. Super Mario Galaxy 2, which launched in North America on May 23, has now sold over 4.09 million units. The game was enthusiastically embraced by review outlets, including GameSpot, which gave the game a perfect score of 10.

[E6600]

move HQ to the US

[rounds1]

I think there's more to the loss than sales being down 25%. Maybe R&D for the 3DS?

[E6600]

and parts

the 3DS could launch before Christmas... I hope

[downphoenix]

Originally Posted by E6600

and parts

the 3DS could launch before Christmas... I hope

Nintendo has proved its Japan-Centricness by stating its only gonna be in Japan by Christmas.

Hopefully they'll change their mind on this, but not expecting a miracle since most Nintendo releases are out in Japan months before the US or never even come to the US.

Anyway though, in any case, this completely shocks me. The costs of a game like Mario Galaxy 2 is miniscule when you compare it to a major hitter on another console like Alan Wake or Heavy Rain. And with the hefty sales of Wii and DS, and the relatively low cost to make them, it seemed a no brainer they would still be reeling in profits, especailly since Capcom still managed a profit despite nothing selling good this year.

[tr1p1ea]

I think you proved your "American-Centricness" .

Also ... what would make Alan Wake or Heavy Rain so costly to develop? And how exactly would MG2 be so 'miniscule' in comparison? I dont see why any of those 3 games would be expensive, aside from poor management.

[AkaneJones]

Originally Posted by tr1p1ea

And how exactly would MG2 be so 'miniscule' in comparison?

Logic dictates that Mario Galaxy 2 uses Mario Galaxy 1's game engine, most of its graphic resources, and other stuff from it. This makes it wholy cheaper to produce than a game that isn't a direct sequel with an already built engine. However one should be aware Mario Galaxy(either) isn't selling as well in Japan as even cheaper to produce New Super Mario Bros. Wii. One should keep in mind though that's it's a Mario game and not Christmas yet so it's too early to call anything on MG2.

[tr1p1ea]

I wasnt disputing that MG2 would be cheaper to produce since it would have indeed built upon MG1. I was asking why the other two would make its costs seem 'miniscule' in comparison? Neither Alan Wake or Heavy Rain were built from scratch, coupled with the fact that writing a game engine isnt that expensive to begin with anyway. I see nothing about the assets used in either of those two games as being overly costly ... unless it was managed poorly or something?

[downphoenix]

well, alan wake was in development for around 6 years, that alone points it to a costly dollar figure (remember, too human ultimately costed 60 million dollars after being worked on on and off for a total of 10 years, but alan wake was being actively pursued, im sure the game had to of been close to the cost of too human. and heavy rain had plenty of resources used, and also had a pretty high budget. i dont believe ther's a tangible figure for either game, but they both were in development for at least 2 times longer than SMG2, didnt't have a previous game to borrow resources from, and feature cutting edge graphics, complex stories, and a hefty dose of voice actig, i'd put both roughly in the 50 mill mark, give or take 10 mill, SMG2 probably didnt even push 10 mill.

[tr1p1ea]

I know Alan Wake has been in dev for over half a decade, but that has nothing to do with the quality of the game; more likely it was poorly managed and just like too human, it shouldnt even be factored in at all.

Once *again* i do not disagree that SMG2 would have costed less to develop, even from an even starting point. But the term 'miniscule' is a little bit of an exaggeration imo.