Nintendo Financials -- 'company ups profit estimate'
- Thread starter Acert93
- Start date
Based on the given evidence of those stats it is.Shifty Geezer said:
But only for those stats.
Historically some devices have better attatch rates for games:consoles. Note that on the link that MS only gives the US attatch rate. Having 1 or 2 killer AAA title is great to get consoles out the door, but for sustained income you need a steady stream of titles. If the 20M Nintendo GCN customers are buying more games, especially 1st party games, than the 20M Xbox customers it is easy to see why they are making a better profit. So install base is only one factor.
This seems to be where Nintendo does well. They release a lot of games that their consumers want. Not a lot of games in general, not a lot of games compared to the PS2, but they do deliver the franchises that many of their core audiance wants. And since a very large percentage of GCN games are 1st or 2nd party Nintendo makes a larger percentage of profits on a per-game sold basis than Sony or MS.
Teasy said:
Teasy;
Simple math isn't hard:
13 (GC) + 30 GBA + 3 (DS) = 46 spots < 51 (PS2) spots
Actually, I'll have to take back my earlier comment and say that all current Nintendo platforms combined don't have as many spots as the PS2 platform...
if you prefer to take out DS, do as you wish - it was merely in reply to the quote on that site that Nintendo has been holding its own against its biggest competitor. It still doesn't change the fact that Nintendo's established handheld business is what is really keeping them in the very good shape they are currently (which is what people here have been arguing). Are you denying this?
The above figures certainly fail to point out a very profitable GameCube business. Of course, a worldwide sale chart would be much more indicative, but it's at least some inside.
Phil said:
Nintendo would be profitable with or without the handhelds business. Is the handhelds business the majority of Nintendo's profits? Yes. But if all they were was consoles, they would still be in much better shape than Sega was in Dreamcast days; and thus able to remain in the console race pending a reversal from profits to losses.
Phil said:
No, Phil, you are denying what was originally being argued and are respinning it.
TEXAN said:
This was debunked so Nintendo haters are wanting to respin the arguement since that one was smacked down.
Also, I have not heard a single person deny that the Handheld does not significantly bolster Nintendo's bottom line. But your own comments like "handheld business is what is really keeping them in the very good shape" indicate you believe Nintendo would not be in "very good shape" without the handheld market.
Do you have some real facts to back up this type of claim? Nintendo has billions in the bank and sells a lot of console games. Obviously their profits would be a lot lower without the handhelds, but would they have no profits? Remember they launched a new system this year that had R&D and a lot of adverting costs to go along with their handheld profits. So if you take away the handheld profits you need to subtrack handheld costs--but no one has these numbers, so the arguement that Nintendo is not making money on the GCN is an assumption with no facts, just a desire to slam Nintendo.
Everything being equal I am not sure you, or anyone, has information on where Nintendo is making their money and if the GCN is not profitable. Considering how well 1st party games do on the GCN and the fact the HW does not lose money makes me think contrary to you. I think with billions in the bank and a slightly profitable GCN Nintendo is in "good" shape. When you throw in handhelds, as in the real world, the fact Nintendo is keeping pace with the market leader in profits must rub some the wrong way.
I agree that a world wide chart is needed... which undermines the initial claims against Nintendo in the first place. Anyhow, what is "very profitable"?
I think it would be good to reread what the article said:
Like I pointed out, Nintendo has a lot of 1st party sales and has hardware that does not lose money. Would they do better with more consoles sold? Well DUH. But there is a perception in these forums, and even stated in this thread, that Nintendo is not making a profit on the GCN. All we can do is ask, "Where are the facts".
One other fact that needs to be taken into consideration about the PS2 numbers is this: Not all of those are made by Sony, actually, very few. So Sony gets royalties on those BUT they are nowhere close to the profits from 1st party sales.
The fact Nintendo sells a lot of 1st party software, and does so on a yearly basis, needs to be taken into consideration. If Sony owns over 50% of the market, but sells 1/2 as many 1st party titles than Nintendo on the home consoles (throwing made up numbers out) then that can explain a lot. Nintendo does a very good job of pushing forward its own software and their customers obviously want it--that is why they buy their platform.
Ps- I am still waiting for an explaination of your *hint* regarding the NDS projections from earlier in this thread. I am not sure what your hint was.
xbdestroya said:
Well that's arguable.
Ever thought that without the handheld business they probably whould not be having as much cash as they do, therefore they would have less funds for R&D and manufacturing of their consoles business?
Without the handheld business, Nintendo would be dead.
Acert93 said:
I wasn't arguing at all in Texan's favor. At this point, neither you nor him seem to have any facts to call either claim unfounded. At this point, can YOU prove that Nintendo has always made money on GameCube sales? And if not, how can you be sure that they have and if not, that their 1st party sales on GC are enough to break-even on what they spent on producing those millions of GameCube units + marketing etc?
IMHO I think Nintendo is making some profit now on GameCube (through software and very little if any on actual hardware sales), but I sincerely doubt the product was sold at a profit from the get-go. Considering that Nintendo has lost marketshare again this generation - their handheld business has clearly won importance as the above figures suggest. In fact, I'd argue that if their handheld business hadn't been running as good, that their savings clearly wouldn't be as healthy.
Acert93 said:
Do you have some real facts to defend them on this front?
The facts I am using to form my take on Nintendo's situation is
1.) decreasing userbase of the GameCube compared to previous generations
2.) competitive pricing of the GameCube
3.) software sales handheld vs GameCube (clearly they show how important the handheld sector is to them)
4.) many partners that all want royalties too (ATi, IBM etc...)
As a reminder, my claim was as quoted by you:
But your own comments like "handheld business is what is really keeping them in the very good shape" indicate you believe Nintendo would not be in "very good shape" without the handheld market.
What's there to even back up? Take a look at the numbers and their respective userbases of their handheld business and that in itself should ring some bells as to how important that sector is for them.
Acert93 said:
Seeing how you love people to back up their claims when you feel they are bashing Nintendo - how about you back up your claims?
The "fact" that HW (=GameCube?) does not (never did?) lose money is one I've never seen backed up.
Acert93 said:
What also needs to be taken into consideration about software numbers in general, regardless if 1st or 3rd party, is that software development has a cost attached to it, thousands of expensive man-hours, marketing etc which are all at a fixed costs even before the game goes on sale. 1st party games cost more to develop for the company that owns them (they are financing it afterall), while 3rd party efforts are financed by external publishers. There are games that despite high sales bring in little profits after all is accounted for. In the end though, we can assume that more sales == more profits, regardless if 1st, 2nd or 3rd party. So, 1st party sales may bring in higher profits, but not always necessarely.
Acert93 said:
That is obvious and well established - and yet, if their console platforms continue to decrease in marketshare compared to previous generations, they'll be less and less customers that buy those 1st party titles. Their handheld business is increasing. Their console business clearly is not.
OVERLORD said:
Err when did i ever say it's bad? I just pointed out how things are. Putting words into people's mouths much?
Good for Nintendo to fund their console business with profits made from the handheld market! I merely said that without the handheld domination int he last 900 centuries, there would be no GC, or Constipation, or whatever they're gonna call their next console.
london-boy said:
Well, you know that these R&D expenses are accounted for normally, right? As in - they are a part of the normal set of expenses, and the profits are calculated after the R&D is taken out. It's not like R&D is taken out of their existing cash reserves in a net profitable situation.
I think it stands to reason that GameCube is profitable to the degree that it could pay for it's own R&D and manufacturing set-up; it may be that they are on the brink either way on that in terms of profitablility, and want to see what happens with Revolution, but I certainly do not think that the situation is as grim as suggested on the console front.
london-boy said:OVERLORD said:
Err when did i ever say it's bad? I just pointed out how things are. Putting words into people's mouths much?
Good for Nintendo to fund their console business with profits made from the handheld market! I merely said that without the handheld domination int he last 900 centuries, there would be no GC, or Constipation, or whatever they're gonna call their next console.
You highlighted a negative in Nintendo's current business model, without the successfull bit which you said meant they were dead! This wasn't a positive statement so their current position & strategy must be bad according to your way of thinking.
Maybe I'm just interpreting your dead hypothesis incorrectly!
Since when was Dead not bad in any walk of life?
Is this now a slang word for something GOOD!
What evidence do you have that Nintendo would have been bankrupt before GameCube came out without their handhelds? Don't tell me you think Nintendo didn't make money on the N64 just because it didn't "win" that generation in console sales? Do you know how many first party games Nintendo sold on N64?
Readykilowatt
Regular
Acert93 said:
One of the more important things that Nintendo does to remain profitable in this business is to keep its game development costs under control (which is easier said than done).
Phil said:
...... like the fact that SCEI is what is really keeping Sony in very good shape? Are you suggesting that Sony should exit the electronics, music and movie business and focus exclusively on gaming? Should Sony withdraw from the console business at the moment they begin to lose marketshare? GM's truck and SUV business is what is really keeping them in relative good shape. Should GM get out of the passenger car business even though they sell more cars per year than Toyota?
Phil said:
What is "some" profit? Care to quantify that? It is also amusing to see that there are so many people who are apparently ignorant to the fact that not all companies are run in the exact same way. Sony, Sega, Nintendo and Microsoft all have different business models and cultures. Obviously, Nintendo's business model is good for its bottom line i.e. sustaining maximum profitability.
When the Cube dropped it's price initially to $99 during the Sept. of '03, they actually began losing money on each console sold. (between $10-$15) But it was a calculated move to increase userbase & in turn the all important 1st party sales. With the removal of the digital out, & the transferral of major manufacturing to China, they are operating evenly as far as the GC's price point is concerned.
Nintendo moved well over a million+ units during that time frame, yet it didn't negatively effect their bottom line.
Nintendo moved well over a million+ units during that time frame, yet it didn't negatively effect their bottom line.
