Last week Nintendo reported it is expecting its first annual loss in its 30 year history. In the last six months, the company has lost nearly $1 billion dollars. According to EEDAR's Jesse Divnich, we shouldn't panic for Nintendo yet.
"I am not too concerned for Nintendo. Nintendo has consistently delivered high-quality products and I think we owe them the benefit of the doubt that they can once again retain the crown in profitability and hardware sales," said Divnich. He also noted Nintendo has hit tough times before, "They’ve stumbled before with the Virtual Boy and the Gamecube, and have easily bounced back with their next release."
Jesse Divnich is the VP of Electronic Entertainment Design and Research. You probably recognize him from Feedback. He points out how difficult console transitions are on video game companies and this is most likely the cause for Nintendo's financial woes. "There are a lot of sunk R&D costs that really drive down profits right before a console launch. I believe this loss is a combination of the poor 3DS sales and the costs Nintendo is currently occurring with the Wii-U development."
While Divnich has faith in Nintendo, he does note how pivotal the Wii U will be for Nintendo. "It does put a lot of pressure, however, on the Wii-U since Nintendo has never had two hardware products perform below expectations consecutively."
I think it bodes well for Nintendo that an industry analyst has faith they will bounce back. I admit when I first read how much Nintendo had lost I was worried, but they've recovered from loss before.
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Comments
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Sally Wong
The reporting by Nintendo is either slick, or unethical, or the information released, has been interpreted incorrectly by someone in the media.
Nintendo actually did not loss 1 Billion dollars as reported. They just did not make the 1 Billion dollars that they expected to make, because they had little to nothing that the consumers wanted, and stated those disappointments in terms of a financial loss of revenue.
The correct statement that should have been reported is;
"Nintendo states that sales were down 1 Billion dollars this year".
One statement has huge financial implementations and consequences, while the other is simply market speculation at best.
If Nintendo ever did lose1 Billion dollars in a single year, I assure you, the stock markets would instantly tremor, and would have reflected such severe losses in several different areas and other ventures.
Love and Kisses: Sally Wong.
Alien_Number_Six
Nintendo needs to start catering to there long time fans. I will take a Blu-ray player, HD graphics, third party support with a side of nostalgia please.
jjfan1
It will take quite a bit before Nintendo falls along the wayside. They are sitting on a hefty amount of cash flow to keep them afloat. They may need to tighten their belts a little but they will be fine.
DPsx72
DPsx72's comment is abusive and has been removed.
macross2012
Nintendo is out of touch with what the gamers want. They are delivering low quality graphics in an age where we want HD killer graphics. The WiiU is a horrible idea and the 3DS is no better.
Nintendo needs to get back to creating cutting edge systems or they will find themselves going the way of sega.. Making games only for systems.
Honestly I think Nintendo has lost its way
lowkevmic
This is the end of a great Era!! Nintendo practically spawned the home gaming generation, and today's love for video games. But like any run it comes to an end. Yes, Nintendo saw loss with the Virtual Boy and the Gamecube, but keep in mind that the Virtual Boy was a device ahead of it's time in an industry of no competition when it came to handheld devices. The Gamecube was a great console, but diehard Nintendo gamers weren't really ready to see Nintendo not only using disc format, but mini disc format. Which wasn't compatible with anything.
lilhotdude1313
"30 year history"? It's actually closer to 130! Might want to edit that. Coincidentally, I bought my 3DS on the same day that Nintendo reported its losses. Just doing my part to help the company bounce back, I guess.
Infinius
I grew up on Nintendo, but sadly (Much Like Winnie the Pooh and Christopher Robbin) it seems I have outgrown them. I will always have a nostalgic place for them, but I have let them go.
Farewell Nintendo. I wish you the best.
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