“Nintendo Co. said its fiscal-first-half net profit tumbled more than 50% and warned the rough ride will continue, slicing nearly a quarter off its full-year profit forecast as sales of its Wii videogame consoles wane amid a shortage of new blockbuster games,” Kenneth Maxwell reports for The Wall Street Journal.
“The Kyoto-based company, long one of Japan’s technology stars, said net profit for the six months ended September fell to 69.5 billion yen ($765.5 million) from 144.8 billion yen a year earlier. That is well below Nintendo’s own previous forecast of 100 billion yen. It didn’t disclose details of its earnings for the quarter ended September,” Maxwell reports. “The first-half slump leaves Nintendo with a headache with respect to its Wii strategy going forward. The results reflect a nearly 50% drop in Wii console sales to 5.75 million from 10.1 million. Overall, first-half revenue dropped 35% to 548.1 billion yen from 836.9 billion yen a year earlier.”
Nintendo “faces growing competition in the hand-held market from Apple Inc.’s iPhone and iPod touch and their growing lineup of games,” Maxwell reports. “Nintendo on Thursday said it will introduce a new version of its popular DS hand-held, the Nintendo DSi LL, that comes with a larger 4.2-inch screen that allows users to surf the Web and will encourage them to use the device as a music player. The current DSi has a 3.25-inch screen. The company said it will go on sale in Japan on Nov. 21 for 20,000 yen, though it did not announce any immediate plans to sell the new device outside of Japan.”
Maxwell reports, “Nintendo said it now expects net profit for the year through March 2010 to be 230 billion yen, down from the 300 billion yen it previously forecast. That would mean an 18% drop from the 279.1 billion yen net profit it reported for the year ended in March.”
Full article here.
@ Randian
Lack of quality 3rd Party Games is the reason for the drop in profits as well as quality 3rd Party Hardcore games on the Xbox 360 and PS3. The price drop on the competitors system couldn’t hurt. Let’s face it all the good games on the Wii and DS are made by Nintendo. Well most of them. The top 20 games on those machines are mostly 1st party. I welcome any other follow up questions. kof4life.1up.com or kof4life@mac.com
@DLMeyer well said. Sorry I couldnt respond faster. I’m at work
My 11 year old son saved up for a year to get the latest iPod touch. Guess what? All of his friends aren’t asking for DSes or PSPs for Christmas but they all want touches. It doesn’t matter if the games are gobs better on the the DS, Apple will probably sell 50 million iPod touches and iPhones next year. Apple isn’t worried about hard core mobile gamers, it’s going after the other 90% of the population who doesn’t want to spend more than $5 on a game no matter how good it is.
@Synthmeister
59.99 Gears of War 2 Worth it
59.99 Modern Warfare 2 Worth it
No one wants to develop those games to sell for 5 dollars. Lets see how many copies of New Super Mario Bros Wii they sell, or Pokemon, or Ratchet and Clank, or Uncharted 2. Will they sell a crap load of Madden 10 on iPhone or hardcore systems. Let’s think seriously here.
In my household we have two iPhones, five Nintendo DS handhelds (one of which is a DSi), a PS3, a Wii, and four iPods.
The kids play with the video games, and the adults get the Apple gear.
This Christmas we will be adding at least another DSi to the mix, and very likely some additional games for the various consoles and handhelds.
Although I can see a small subset of people choosing iPhone or iPod over Nintendo, I don’t think they’re a real threat at this point.
They need to hurry up and get the Wii HD out the door to sell people on upgrades. I never bought a Wii because I’m not going to hook up a standard def game system to a high def TV. Once the Wii HD is finally out, I’ll definitely pick one up.
Does anyone think they will throw a phone into the mix?
“Let’s think seriously here.”
I can’t possibly imagine spending $60 on a game. Seriously, that is absurd! Not when I can spend $10 on a game that is almost the same.
This is the way vast majority of people will think. This is exactly the same thinking behind buying a $300 Netbook, rather than $1,200 MacBook Pro. Until a year ago, Nintendo and Sony were selling gobs of portable devices (and games for them) to children of all ages. This year, large numbers of those children aren’t asking for Nintendo (or Sony); they are asking for iPod/iPhone.
To actually believe that Nintendo (or Sony) would NOT be affected by the iPod gaming ability is clearly delusional. Just like digital cameras have overwhelmingly outnumbered analogue, film cameras (even though they aren’t nearly as good), just like iPods have overwhelmingly outnumbered portable CD players (even though they aren’t as good), so will iPods/iPhones seriously affect the numbers of DS. Even in this thread, there are several posts already testifying to that. People who have both iPods AND DS, using iPods for gaming much more than DS.
Nintendo can only hope to continue to sell DS to the very small, dedicated hard-core gaming group. Outside of that group, vast majority will prefer consolidating MP3 player, video player, web browser, email device and a portable gaming console (not to mention a phone).
@ Predrag
Well the millions of gamers who have an Xbox 360 and PS3 do pay $60 a game and that is the bottom line. I am glad you don’t but millions of people do, so why are we acting like they don’t want to. If they didn’t then why do they? I don’t think we will see the day that Metal Gear Solid 4 is going to be on an iPhone. The development costs don’t meet a society that wants to complain about a 10 dollar game and demand a price cut before they buy it. $50-$60 dollars is fair for the 30 hours it takes to beat Metal Gear Solid 4.
Some of you are killing me. You don’t get it. It doesn’t matter if the iPhone/Touch is in direct competition with Nintendo because it’s all about scarcity of resources.
Most people have a limited budget and have to choose how they are going to spend their money. Just like the music industry can’t seem seem to figure out, people now have more choices for personnel entertainment like DVDs. If you know have to split that same budget between CDs and DVDs you won’t be buying as many CDs. But if you now have to spilt that again with gadgets and computers you may buy even less CDs and DVDs.
Nintendo is competing with a device that is a phone, has 3G and WiFi internet, GPS and acts as a PDA and game machine. This forces people to choose between a dedicated game player and the value of a multi-funtioning device that also plays games. I’m sure a lot of people were willing to take a small hit on game play to getting all the other functionality that come with the iPhone or Touch. Not everyone is going to make the choice on game play alone. In fact I say the majority won’t.
Plus, if you over 25 you look kinda dumb at the airport heading to a business meeting with a portable game machine in your hand. The iPhone and Touch give you stealth.
Hardcore gaming and gamers are a niche market. A big market but not big enough to save it from the iPhone.
Niche? Come Nov 10th and Call of Duty: MW 2 release you’ll see how niche it is .. likely selling 15+ million copies the first week many buying versions costing more then $60.
Nintendo is like Apple .. they have a ton of money in the bank, some of the best designers in the business, not to mention the best game franchises. Until Apple can have something that people identify with like Mario, Zelda, etc I don’t think they worry about Apple.
Apple’s core is casual usage. I’ve played many games on both and a $10 iPhone game is nothing like the experience of ScribbleNaughts $30. iPhone graphic wise is capable but with limited controls some games are just not possible or will be very enjoyable. Nintendo just crossed 113 million DS sales and the device keeps selling due to a large library of quality games. To see the difference compare the sales of Maddon on DS to Madden on iPhone/Touch. EA themselves have said the sales are just not there.
No one is going to make a living with free/$1.00 games so your left with the quality of those games which some are decent but nothing you’d spend more then 15 mins playing when your bored.
If Nintendo opens a online store selling their old Super Nintendo / NES catalog on DS, Apple would be done. That would flood the market with a huge catalog of games that could sell easily for $1.00.
And any parent touting iTouch as a great choice .. please go do the drop test and let me know how that iTouch makes out.. Nintendo’s portabled take a beating.