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[Fox Mulder]

In Iwata's own words, they are not good at competing. I've never heard of a company making such comments. The only reason anyone owns stock is for the chance to sell it once (in their minds) Nintendo announces full support of smartphones and the stock price shoots up.

it's not necessarily a bad thing to admit they can't compete with huge billion dollar corporations that sell consoles at a loss for a variety of reasons.

Nintendo just needs to fill a niche and sell decently powered consoles at a good price. You can get a ps4 for $400, so no wonder why Nintendo asking $300 for a console that pretty much only offers their games isn't working.

 

[Boney]

I hope they don't get encouraged by these decent seasonal sales in Japan and think it's a changing of tides argueing the states are slower at adapting to new technologies

 

[jcm]

The second the investors show signs of revolting, Nintendo will just buy back the stock and go private.

Nintendo will do their own thing regardless of how much the usual suspects complain in every Nintendo thread. As long as they don't get really crazy they'll have the money to stick around long after MS and Sony have sold their gaming divisions and EA has collapsed under the weight of its own incompetence.

Taking nintendo private would be extremely expensive and complex, and they would have to take a bunch of debt to do so. It's not impossible, but it's not something they could do on a whim.

 

[MechaX]

*ALL Pokemon/Zelda/Mario etc gameboy and GBA games available on 3DS and Wii U eshop.

Seriously though, guys, what is Nintendo's major malfunction with the eShop/Virtual Console?

 

[Jinko]

The second the investors show signs of revolting, Nintendo will just buy back the stock and go private.

Nintendo will do their own thing regardless of how much the usual suspects complain in every Nintendo thread. As long as they don't get really crazy they'll have the money to stick around long after MS and Sony have sold their gaming divisions and EA has collapsed under the weight of its own incompetence.

Yup cause throwing money at the problem will make it go away.

 

[POWERSPHERE]

Phone Nintendo will never happen, I hope. They're the only decent hardware developer left.

 

[Mysterious]

The second the investors show signs of revolting, Nintendo will just buy back the stock and go private.

Nintendo will do their own thing regardless of how much the usual suspects complain in every Nintendo thread. As long as they don't get really crazy they'll have the money to stick around long after MS and Sony have sold their gaming divisions and EA has collapsed under the weight of its own incompetence.

You make it sound like it's some simple task.

 

[Air Zombie Meat]

Seriously though, guys, what is Nintendo's major malfunction with the eShop/Virtual Console?

They like to dribble them out at a slow pace. At a guess I'd say it's so that they have more chance of selling the less wanted games and that it means less competition for Wii U games.

 

[wildfire]

The second the investors show signs of revolting, Nintendo will just buy back the stock and go private.

Nintendo will do their own thing regardless of how much the usual suspects complain in every Nintendo thread. As long as they don't get really crazy they'll have the money to stick around long after MS and Sony have sold their gaming divisions and EA has collapsed under the weight of its own incompetence.

I don't think they'll make a move so rashly but if you look at my other posts in this thread I have stated this is a possibility.

If I were them I would hesitate because that huge fat warchest would be drastically smaller if I brought back stocks to ensure creative control. Those reserves help a lot dealing with the rising costs of development and paying off the typical expenses employees as well payed as the ones in Nintendo have while we struggle through this console cycle.

Then again I don't even know of a good estimate of their war chest to be sure if buying back would hurt them that badly.

Yup cause throwing money at the problem will make it go away.

Actually there isn't any one problem. There are multiple and Nintendo's staff probably could cost with a console that sells LTD 20 million like they did with the game cube. So buying back stocks to part ways with disagreeable investors is a solution.

 

[Y2Kev]

The second the investors show signs of revolting, Nintendo will just buy back the stock and go private.

Nintendo will do their own thing regardless of how much the usual suspects complain in every Nintendo thread. As long as they don't get really crazy they'll have the money to stick around long after MS and Sony have sold their gaming divisions and EA has collapsed under the weight of its own incompetence.

This is incredibly difficult and expensive, not to mention it would totally change the capital structure of the resulting company.

I think more likely would be new Directors that select a new CEO.

 

[Jinko]

Actually there isn't any one problem. There are multiple and Nintendo's staff probably could cost with a console that sells LTD 20 million like they did with the game cube. So buying back stocks to part ways with disagreeable investors is a solution.

That's not really my point, the problem is that the Wii-U isn't selling?

Even if they did buy out stock what then? What about next gen? What's to stop the same happening again except this time you have no investors to grumble about it.

Also Gamecube was making a profit throughout the whole of its life from what I remember, Wii-U is actually making a loss. Not only that but considering the cost of development for games and the poor sales I am sure they are losing money there as well.

 

[jcm]

My modeling suggests about a ~60-70% miss in operating profit for the FY, but the return to profitability will be enough to give Nintendo another 2 years leeway despite the big miss and let them play out the Wii U. In any case, none of the major Japanese institutions holding Nintendo stock are eagerly pushing for a strategy shift - they are more concerned about the preservation of long-term value and most are on-board with Nintendo not killing their pricing power by jumping into smartphones.

Anyone concerned about the long term value of nintendo who isn't concerned about the current strategy isn't paying attention.

 

[RoninChaos]

I tend to agree, because I want to pay less... but at the same time I don't think it's reasonable to say that the great games in the VC library are over-priced compared to the trash that gets released on smartphones. Shouldn't classic games like Earthbound, or Super Mario World, or Chrono Trigger, etc be a little more expensive than games that are essentially equivalent to the micro games in Warioware?



That's cute. Have you seen the sales figures for Mario Kart Wii?



It's convenient to ignore the insane success of the Wii when saying this, while simultaneously avoiding the obvious similarities between the Wii U game pad and the success of tablets and touch screen gaming with the casual audience. As for core gamers, I don't think you can consider yourself a core gamer if you don't also play Nintendo's games.

The problem with VC pricing is that it isn't low enough to catch spontaneous buyers. Most people would drop 5 bucks on a game they used to love or on a game they want to take a chance on. Getting into that 8-10 buck territory stops that. Further, it's crazy to price that stuff that way when people can emulate with little effort. Nintendo still acts like they exist in a vacuum, and that's their biggest problem. People have a LOT of entertainment options these days, and some of those entertainment options will play those old games. I think their biggest mistake is lack of VC titles currently at a price point that encourages people to buy. Why not have all the Zelda's available? How many folks on this forum would toss hundreds of dollars at VC games if there were more available? How many older gamers would that hook? I would LOVE to play some of the titles I enjoyed as a child on my tv again. I would rather pay for those old games, play them on the TV or the game pad, but not for 10 bucks a pop if nothing is added. Rom dumps at that price point are kind of insulting.

It reminds me of piracy and steam. Most people will spend 5 bucks on a game rather than fucking with trying to pirate it if the price point is in impulse buy territory.

Anyway, I hope they can right the ship. I really do. And to do that I think they really need to look outside the bubble a bit.

 

[JoeM86]

They like to dribble them out at a slow pace. At a guess I'd say it's so that they have more chance of selling the less wanted games and that it means less competition for Wii U games.

They need to find a happy medium.

Not offload everything at once, but not dribble it out so ridiculously slow that there are sometimes weeks without it.

2-5 a week seems plenty

 

[QaaQer]

Are there really people who think the answer to Nintendo's failing console business is to go mobile and compromise their successful handheld business?

As an either/or proposition, no. As a 'you guys should sell some stuff on mobile too' proposition, sure.

 

[Baleoce]

Informative post Aquamarine. The end of this month will be an interesting time for sure.

 

[H_Prestige]

As long as Iwata is in charge, nothing will change. And I really doubt Iwata will be fired, so this company will be run into the ground before they opt to go multiplatform or smartphones.

 

[Gummb]

I just hope that this results in a major expansion in all areas - development, online infrastructure, smart phone integration, and R&D - rather than reducing their primary business in favor of unknowable markets elsewhere.

Break out the war chest, Nintendo. Nintendo is nearing golden-age status with their recent software, but so few are purchasing it on Wii U it hurts. 3D World, WWHD, W101, Pikmin 3, NSMBU and Lego City should have all been huge hits.

As long as Iwata is in charge, nothing will change. And I really doubt Iwata will be fired, so this company will be run into the ground before they opt to go multiplatform or smartphones.

It's already known that the vast majority of Nintendo's operating profit comes from selling hardware. Both of your suggested strategies damage their primary business in significant ways. Try harder.

 

[Hiccup]

This is incredibly difficult and expensive, not to mention it would totally change the capital structure of the resulting company.

I think more likely would be new Directors that select a new CEO.

This will defintely not happen. Iwata is friends with essentially all of them. It's a big boys club. He would resign on his own before being let go.

 

[Captain Smoker]

As long as Iwata is in charge, nothing will change. And I really doubt Iwata will be fired, so this company will be run into the ground before they opt to go multiplatform or smartphones.

Quoting myself:

• Older guys like Miyamoto getting slowly replaced by fresh blood
• New facility for 200.000.000 $ which can host more than 1.500 new employees, faster sharing of resources
• They aquired N.E.R.D. and they're probably important enough that Iwata shares some of the most confidential data with them on time
(and makes an Iwata Asks with them). Back then, they were researching cloud-technologies. This could gives us a hint for their future plans
• Emphasis on the online business (better later than never)
• Using the smartphones market indirectly
• Integrated Research & Development Division for future hardware systems
• Emphasis on exclusive 3rd Party collaborations & crossovers
(• Emphasis on closer worldwide releases)

 

[Barkley's Justice]

There's a huge psychology change underfoot as well: kids right now are growing up with iPads and touch controls. Nintendo is no longer synonymous with a child's first gaming exposure. That nostalgia effect Nintendo games have banked on with various sequels for decades no longer hold the cachet they once did for many youts growing up right now.

 

[DragonSworne]

it's not necessarily a bad thing to admit they can't compete with huge billion dollar corporations that sell consoles at a loss for a variety of reasons.

Nintendo just needs to fill a niche and sell decently powered consoles at a good price. You can get a ps4 for $400, so no wonder why Nintendo asking $300 for a console that pretty much only offers their games isn't working.

Nintendo is a huge billion dollar company...

Nintendo can offer a PS4 Xbox One powered system just as easily as the other guys. They just rather break their bank selling overpriced low TPD system instead of spending the money on something useful, like a better GPU.

 

[Neff]

If anyone should get the axe, it is Miyamoto, not Iwata.

As the general manager of EAD, Miyamoto was responsible for approving the phoned-in Mario games and the bloated hand-holdy Aonuma Zelda games.

You mean the games that made millions upon millions of dollars for the company and kept it in good health?

It's already known that the vast majority of Nintendo's operating profit comes from selling hardware.

Actually most of it usually comes from software, but healthy install bases of hardware are crucial to that.

 

[Y2Kev]

This will defintely not happen. Iwata is friends with essentially all of them. It's a big boys club. He would resign on his own before being let go.

There's not much of a difference. If he resigns, it's going to be because he's getting pressure to do so or fear of imminent replacement. He's not going to resign out of some sense of duty.

I also said new directors would be elected by shareholders. The premise was that there was a shareholder revolt.

 

[Rösti]

Great thread, Aquamarine. The upcoming conference call could very likely be one for the ages. I'm very interested to know more about this:

5. Iwata conceded that, contrary to his original plans, he will hold a corporate strategy meeting after the Q3 release to discuss the state of Nintendo and their current strategy. If Q3 results are below expectations, this could very well translate into some sort of company overhaul.

Where did he say this, in an IR presentation or via a Q&A? If this meeting would be held prior to E3, I wonder how it would impact their presence at the expo. While they probably will have very few third party games to show, I think having a proper press conference instead of just a Nintendo Direct broadcast would be better. They need as much coverage as they can get.

Shame Nintendo doesn't provide a webcast of the investor meetings, would be nice to follow in realtime. But most important is the earnings release, so that will be interesting to see.

 

[DSN2K]

WiiU is massive failure and sooner Nintendo move on from it the better, They shouldnt waste their money any further on the platform beyond 2014 imo.

 

[wildfire]

That's not really my point, the problem is that the Wii-U isn't selling?

Even if they did buy out stock what then? What about next gen? What's to stop the same happening again except this time you have no investors to grumble about it.

Also Gamecube was making a profit throughout the whole of its life from what I remember, Wii-U is actually making a loss. Not only that but considering the cost of development for games and the poor sales I am sure they are losing money there as well.

Well yeah the Wii U isn't selling but it's still up in the air if it will recover enough to sell Gamecube levels. If they manage to do that they'll tread water and will have the resources to do a proper console that sells well. Hopefully they learn their lesson.

The hardware only sells at a loss by itself. Nintendo makes a profit as long as one game is brought.

You have a point regarding dev budgets but that is too much of an unknown for me since Nintendo has been doing everything in their power to cut costs. Who knows how cost efficient they are compared to other dev teams.

 

[Baleoce]

I just keep looking back to that article by Emily Rogers showing all of Iwatas backtracks and repeated mistakes. I just think it would be a nice time now to give someone else a shot tbh.

 

[QaaQer]

It's already known that the vast majority of Nintendo's operating profit comes from selling hardware. Both of your suggested strategies damage their primary business in significant ways. Try harder.

source?

I'm pretty sure all we know is that the majority of revenue comes from hardware, not profit.

 

[Manmademan]

Well yeah the Wii U isn't selling but it's still up in the air if it will recover enough to sell Gamecube levels.

This isn't "up in the air" at all. 20 million is totally out of reach for that console at this point.

 

[TreasureHunterG]

it's not necessarily a bad thing to admit they can't compete with huge billion dollar corporations that sell consoles at a loss for a variety of reasons.

Nintendo just needs to fill a niche and sell decently powered consoles at a good price. You can get a ps4 for $400, so no wonder why Nintendo asking $300 for a console that pretty much only offers their games isn't working.

Nintendo has tons of money, they could afford to make a better hardware if they really wanted to.

 

[Chittagong]

There's a huge psychology change underfoot as well: kids right now are growing up with iPads and touch controls. Nintendo is no longer synonymous with a child's first gaming exposure. That nostalgia effect Nintendo games have banked on with various sequels for decades no longer hold the cachet they once did for many youts growing up right now.

I was thinking of exactly this today when reflecting on this topic during a hike - the DS and 3DS generations of kids are quickly growing older and gradually their interest in portable gaming begins to taper off. Nintendo has successfully introduced a generation after generation to the Game Boy lineage of products, always being the kids #1 portable gaming device of choice. This has built the basis for their continued portable success. But now with tablets, Angry Birds, Candy Crushes and Clash of Clans it's hard to imagine Nintendo could ever regain that position. So there is a risk that as the current 3DS generation outgrows the device Nintendo's portable business as we know it falls as well.

 

[SmokedMeat]

So in the end what are we really hoping for? Smart phone companion apps?

Because as a U owner I'm not going to cheer at the thought of them planning to phase my $350 system out.

 

[QaaQer]

I was thinking of exactly this today when reflecting on this topic during a hike...

lol, I was thinking about it yesterday during a hike (on snowshoes). Glad I'm not the only one.

 

[Confidence Man]

How is it we still haven't seen or heard anything about a new Zelda? Metroid? These guys are clueless when it comes to getting people interested in the system. If they had any sense at all they would've planned farther ahead and busted their asses to get a new Zelda out this year.

 

[w1gglyjones]

Great thread, Aquamarine. The upcoming conference call could very likely be one for the ages. I'm very interested to know more about this:


Where did he say this, in an IR presentation or via a Q&A? If this meeting would be held prior to E3, I wonder how it would impact their presence at the expo. While they probably will have very few third party games to show, I think having a proper press conference instead of just a Nintendo Direct broadcast would be better. They need as much coverage as they can get.

Shame Nintendo doesn't provide a webcast of the investor meetings, would be nice to follow in realtime. But most important is the earnings release, so that will be interesting to see.

I imagine he said this at the December 20th call that Aquamarine referred to in the OP in point number 4. Which makes sense because previously he also said that he wanted to wait for the Holiday results before starting to look at their overall strategy. Guess those results aren't good.

 

[kswiston]

WiiU is massive failure and sooner Nintendo move on from it the better, They shouldnt waste their money any further on the platform beyond 2014 imo.

Can you point to a single example of a videogame hardware manufacturer giving up on a major console after 2-3 years, only to have better luck with their next gaming platform?

This isn't "up in the air" at all. 20 million is totally out of reach for that console at this point.

I wouldn't go that far. The main issue is that Nintendo systems are not traditionally slow burners. Even the DS was blowing the roof of by this point in its life cycle. That is what makes me doubtful that we will suddenly see a recovery to GCN numbers. It's not as though it is impossible in general though.

 

[Captain Smoker]

How is it we still haven't seen or heard anything about a new Zelda? Metroid? These guys are clueless when it comes to getting people interested in the system. If they had any sense at all they would've planned farther ahead and busted their asses to get a new Zelda out this year.

Furthermore, everyone knows that Zelda is probably a 2015 - title and they should take their time to create a good game.

 

[StreetsAhead]

How is it we still haven't seen or heard anything about a new Zelda? Metroid? These guys are clueless when it comes to getting people interested in the system. If they had any sense at all they would've planned farther ahead and busted their asses to get a new Zelda out this year.

1) Zelda U has been spoken about multiple times.
2) There's a remake out and spin-off Zelda for the system.
3) Metroid is, sales-wise, as irrelevant as it always has been.
4) There's no evidence either way showing whether Zelda U will make it this year or not, at this point. No matter how unlikely it is.

 

[QaaQer]

Furthermore, everyone knows that Zelda is probably a 2015 - title and they should take their time to create a good game.

does that mean the new console zelda will be like link (get everything at the begining etc) and be multiplayer?

 

[H_Prestige]

I just hope that this results in a major expansion in all areas - development, online infrastructure, smart phone integration, and R&D - rather than reducing their primary business in favor of unknowable markets elsewhere.

Break out the war chest, Nintendo. Nintendo is nearing golden-age status with their recent software, but so few are purchasing it on Wii U it hurts. 3D World, WWHD, W101, Pikmin 3, NSMBU and Lego City should have all been huge hits.



It's already known that the vast majority of Nintendo's operating profit comes from selling hardware. Both of your suggested strategies damage their primary business in significant ways. Try harder.

I can guarantee you that Wii U is not bringing in any operating profits, and the GC and N64 didn't bring anything significant either. And without third parties, they don't get royalties. Hardware business only makes sense if you're 1) selling a lot of hardware, and 2) collecting a lot of licensing fees from third party publishers. A Nintendo HD console today makes no more sense than Activision making a COD box.

What's more, there's never been a better time to go third party. Video game consoles have never been more similar. It's not like the 90's where every company's hardware was completely different in terms of underlying technology, game development, storage media, etc, where exclusive games meant a truly tailored experience. The ps4 and xbone are essentially the same thing with the same input device. Even the Wii U isn't much different. Going multiplatform doesn't mean having to tailor your game to different hardware or having to water things down. Software development can continue as usual.

 

[Jinko]

Nintendo has tons of money, they could afford to make a better hardware if they really wanted to.

They could, but do they want to.

Up to now Nintendo have been all about making hardware which makes profit from day one, I am sure this was the intention with Wii-U also but the cost of the controller has probably caught them off guard.

If they do go the route of a making a powerful console they have to be sure that A) the console will sell and B) 3rd parties will support it, otherwise they will just have a more expensive version of the Wii-U on their hands.

Tons of money can soon run out when you are losing hand over fist on production costs.

 

[Manmademan]

Can you point to a single example of a videogame hardware manufacturer giving up on a major console after 2-3 years, only to have better luck with their next gaming platform?

There isn't an example of a major hardware manufacturer with a major console selling this badly- unless you count nintendo killing the virtual boy then going on to make the GBA.

 

[Entryhazard]

Plus there's changing tastes, the "Maturing" of the industry, the repulsion to the old and familiar

I don't think that it's the issue, the best selling games are really frequent iterations like CODs and ACs, with the monsters of this year being GTA FIVE and TLOU that is a TPS featuring Zombies (a really good one, but nothing unseen before in concept, and we're alking about novelty here)

 

[Chittagong]

So in the end what are we really hoping for? Smart phone companion apps?

Because as a U owner I'm not going to cheer at the thought of them planning to phase my $350 system out.

Not hoping for, but have predicted a while ago that Nintendo will inevitably introduce an ARM based console, one that we would class as a 'microconsole' compared to PS4 and Xbone. They might introduce it first as a "third pillar" next to Wii U and eventually it will be their main home product line:

http://m.neogaf.com/showthread.php?t=642635

 

[Manmademan]

Not hoping for, but have predicted a while ago that Nintendo will inevitably introduce an ARM based console, one that we would class as a 'microconsole' compared to PS4 and Xbone. They might introduce it first as a "third pillar" next to Wii U and eventually it will be their main home product line:

serious question, why wouldn't someone just buy a PS360 instead? equivalent cost, far superior network, larger library, equivalent or possibly greater technology.

There's no demand here for that system. This niche is filled.

 

[BoboBrazil]

You won't see any new games announced for wii u that weren't already in development. Nintendo is a miserly company and won't invest resources and put their games on a platform that doesn't have a fan base large enough to make their games multimillion sellers. Nintendo is in a bad position overall with a shrinking handheld market and continually losing more of their fan base every console(the Wii was an anomaly). Kids growing up today don't think of Mario when they think of videogames and Nintendo refuses to make new IPS to grab the upcoming generation.

 

[Chittagong]

serious question, why wouldn't someone just buy a PS360 instead? equivalent cost, far superior network, larger library, equivalent or possibly greater technology.

There's no demand here for that system. This niche is filled.

Nintendo games.

- Pikmin 3
- New Super Mario Bros U
- Super Mario 3D World
- Mario Kart 8
- Super Smash Bros Wii U
- Zelda Wind Waker HD
- Donkey Kong Country Tropical Freeze
- Dr Luigi
- NES Remix
- Wii Sports HD

all are within realms of plausibility for ARM SoC performance in the next few years. Plus their back catalog.

Also, Wiimote.

 

[H_Prestige]

Nintendo games.

- Pikmin 3
- New Super Mario Bros U
- Super Mario 3D World
- Mario Kart 8
- Super Smash Bros Wii U
- Zelda Wind Waker HD

all are within realms of plausibility for ARM SoC performance in the next few years. Plus their back catalog.

Also, Wiimote.

Then why isn't anyone buying the Wii U? Price? Nintendo could drop the Wii U to 199 tomorrow just by removing the gamepad.

 

[wildfire]

Not hoping for, but have predicted a while ago that Nintendo will inevitably introduce an ARM based console, one that we would class as a 'microconsole' compared to PS4 and Xbone. They might introduce it first as a "third pillar" next to Wii U and eventually it will be their main home product line:

http://m.neogaf.com/showthread.php?t=642635

The last time they introduced a third pillar was the DS. Being a micro-console will barely help better than the Ouya even though Nintendo as a company is far more established with supply chains, online infrastructure and marketing power.

Then again the Ouya doesn't have Nintendo games and a PS3/360 level hardware selling for $100 might be appealing. I just think it needs to be more than just a microconsole to be as revolutionary as the DS was when Nintendo had the NGC and and GBA at the time.