Nintendo loses Money

[mat]

http://www.heise.de/newsticker/data/wst-03.10.03-001/ (sorry, German)

They lost 23 Mio € last Year.

 

[London Geezer]

u mean... they ONLY lost 23M euros??? that's like... NOTHING.. compared to the amount of money MS is reportedly losing.... or just think about how much money Sony will lose with every PS3 sold...

EDIT: ooops, didnt see the "only in the first half of the year" bit.... now that is slightly different.. :?

 

[cybamerc]

The loss is for the first half of the current fiscal year. They still expect to turn a profit for the full year.

 

[CeiserSöze]

Yep, they lost 3 billion yens in the first half but they expect to earn 60 billion for the full year.

Still I'm a bit surprised. I know that spring/summer is generally a weak time for the industry but I find this a bit extreme... losing money in the first half while expecting to earn a sh*tload of it in the second half. What's going on there?

 

[zurich]

Yep, they lost 3 billion yens in the first half but they expect to earn 60 billion for the full year.

Still I'm a bit surprised. I know that spring/summer is generally a weak time for the industry but I find this a bit extreme... losing money in the first half while expecting to earn a sh*tload of it in the second half. What's going on there?

It means the industry is completely imbalanced :?

 

[a4164]

I just grabbed this from my mailbox:

Japan's Nintendo to post first-ever net loss in H1 on strong yen
- AFP to My Yahoo!

TOKYO (AFP) - Nintendo (news - web sites) Co. Ltd., the Japanese maker of the Gameboy hand-held computer game
consoles, said it now expects to post a net loss of 3.0 billion yen (27 million dollars) in the six months to September due to the yen's steep rise, reversing an earlier forecast of a 15 billion yen profit.

This will be the first time the Kyoto-based company will have suffered a net loss since its establishment.

Nintendo said Friday that it had incurred foreign exchange losses of some 40 billion yen in the first half of the current fiscal year as the yen had appreciated sharply.
The firm now assumes that the dollar will average 114 yen in the full year to March, compared with the originally estimated rate of 117 yen.

The company forecasts a first-half current loss of 7.0 billion yen, compared with a 25 billion yen profit estimated earlier, and an operating profit of 28 billion yen, lower than the previously given 35 billion yen.

First-half revenue is now seen at 210 billion yen, down from 230 billion yen previously.

Nintendo also blamed the delay in imposing a price cut on its Gamecube consoles, originally planned for the early part of the first half, for the drop in the first-half operating target.

The company stressed that the price cut should help bolster global sales of its Gamecube consoles during the Christmas sales season, the most important period for any game makers, including industry leader Sony Computer Entertainment, which makes the PlayStation 2 (news - web sites) consoles.

It said it projects year to March 2004 global shipments of 6.0 million Gamecube consoles, in line with the original target, and global sales of 50 million game titles, also in line with the original estimate.

Nintendo at the same time cut its full year to March net profit forecast to 60 billion yen from the previous estimate of 65 billion yen and its current profit estimation to 95 billion yen from 110 billion yen.

Despite the profit-warning, Nintendo stressed that its underlying core business remained solid, noting the downgrade of the profit forecast was driven by a one-off factor.

As a result, the firm has maintained its full-year revenue forecast at 550 billion yen and the operating profit target at 115 billion yen.

 

[CeiserSöze]

I find it a bit funny that Nintendo is always blaming the strong yen for not meeting their expected revenues / profits :?

 

[TheMightyPuck]

Foreign exchange losses/gains are real and calculable.

 

[Magnum PI]

may it be that in the first half they have to pay to producte these consoles they didn't sell.

now that they sell the console they already paid we can expect big income.

 

[Vince]

It means the industry is completely imbalanced :?

It makes sence from a global marketplace standpoint. And when you factor in demographic issues, it's easy to see why the bias towards Fall/Christmas has such a large presence.

Balance and equilibrium are the marketplace.

 

[zurich]

It means the industry is completely imbalanced :?

It makes sence from a global marketplace standpoint. And when you factor in demographic issues, it's easy to see why the bias towards Fall/Christmas has such a large presence.

Balance and equilibrium are the marketplace.

I know what you're saying, but it must be frustrating for the game industry to sell 80% of its goods in a 3 month period.

 

[cthellis42]

True, but why should it change just for them? Movies and TV have short windows where they try to stuff in all their quality/gimmicky episodes and blockbusters... Thankfully at least books don't care. <grins>

 

[zurich]

True, but why should it change just for them? Movies and TV have short windows where they try to stuff in all their quality/gimmicky episodes and blockbusters... Thankfully at least books don't care. <grins>

Well, Hollywood generally has two boom cycles. One in the summer, the other in the winter. I think Sony/MS/Nintendo is trying to make something of the summer months by releasing high profile titles then (like GT3, KOTOR, etc), but it seems a ways off before we get 'summer blockbuster' games.

 

[CeiserSöze]

This is interesting to me too:

Nintendo also blamed the delay in imposing a price cut on its Gamecube consoles, originally planned for the early part of the first half, for the drop in the first-half operating target.

Why should they have to postpone a price cut? I can't imagine anything besides stubborn executives that could cause a delay of a price cut...

 

[Qroach]

Postpone is BS for "it wasn't planned". So much for those "who cares at least nintendo is profitable" comments people throw areound like a small crutch.

 

[cthellis42]

Postpone is BS for "it wasn't planned". So much for those "who cares at least nintendo is profitable" comments people throw areound like a small crutch.

Didn't Sony just have a 98% profit drop recently? They going anywhere soon?

The only thing I know about profit numbers is you have to look at a LOT more of them and more than just them, until right around the point where you want to take an uzi to work. Right before that point you're probably the best informed.

 

[Vince]

Didn't Sony just have a 98% profit drop recently? They going anywhere soon?

The only thing I know about profit numbers is you have to look at a LOT more of them and more than just them, until right around the point where you want to take an uzi to work. Right before that point you're probably the best informed.

I think if you look critically on both you'll find that:

• Sony Group has a large and highly diversified revenue stream and infastructure that's probably in the high hundreds of millions.
• Nintendo is nowhere as diversified and once the well is dry (as it looks like it did with the GC, we'll see how GBA fairs next year) with a burn-rate that I'm guessing they'll have... the cash or cash-equivalents will go like nothing.

I think your comperason is just a wee-bit fallicious. But, I think you knew that and I just like correcting you. I also think people don't heed enough of what Quincy says, concidering his knowledge and exposure of the marketplace is alot better than most of ours from what I gather.

 

[TheMightyPuck]

Well when you consider Nintendo took a 40million charge on 5 billion dollars of us dollar denominated assets and they lost 27 million, they ain't gonna close up shop soon.

 

[TheMightyPuck]

Nintendo is nowhere as diversified and once the well is dry (as it looks like it did with the GC, we'll see how GBA fairs next year) with a burn-rate that I'm guessing they'll have... the cash or cash-equivalents will go like nothing.

Nintendo made a disappointing 66 billion yen (around $500million) last fiscal year (blamed on poor GC sales). They lost $30 million the first half of this year and will almost undoubtedly make money in the second half. What burn rate are we talking about here? This story is interesting because Nintendo has posted it's first red ink ever. I doubt this is an harbinger of doom. They are, however, moving in the wrong direction.

 

[cthellis42]

I think your comperason is just a wee-bit fallicious. But, I think you knew that and I just like correcting you.

Of course it is. My next sentence was pointing that out. One set of numbers tells us nothing about overall trends--for the good or for the bad. If you don't know what's behind them (and next to them, and going on from other people around them, and...) all you have a few pixels of a big bitmap.

Meanwhile, we eternally see published analysts stymied or completely wrong. We also see them right, of course, but economics is a lot more baffling than circuitry--people just aren't predictable.

Thing is, I basically object to lots of random remarks without anything to back them up, and ones that snatch one news point or one press release to back up everything. A quarterly loss doesn't doomsay a company, a gain doesn't mean they AREN'T, comparative "increases" for specific times and specific markets can be highly manipulative, overall sales/profits for longer periods can obscure certain trends as well...

Point is, if we want to EARNESTLY talk about such matters, the childishness has to leave, and lots more ACTUAL FIGURES have to be brought up and commented on, with accountable sources and appropriate comparisons, and without manipulations. Part of the reason people have some knee-jerk reactions is they are confronted by those saying "ha-ha!" It clouds just about every discussion on here, "politicizing" remarks and responses, and just in general lowering the class and intelligence of anything meant to be serious commentary.

For a functional discussion about the economics, we realistically need more figures than conjecturing about chips, and yet we rarely ever see anything of substance. If one wants to make comments about market realities and try to invoke earnest, educated discussion, then one has to DO that. So far it's been a people flailing about with a lot of wiffle bats.

It has to start with plenty to talk about and ABSOLUTELY has to start without partisan comments, ego-stroking, or personal insults. And if anyone brings it up it also has to be IGNORED, not perpetuated. Else all can expect is exactly what we get now.

And gee, that's really FUN, isn't it?