Monday, 31 October 2011

Nintendo's Near Billion Loss - What Happened and What Happens Next?

Even through its toughest times, when it was a distant third in the console race, Nintendo still always managed to stay in the green. The last few years have arguably been very kind to the company with the Wii becoming the hands down winner of this current generation in terms of sales, so why has The Big N recently posted such a staggering huge loss of profits?


Certainly every company has it's ups and downs, and video game businesses are no exception to the rule. That being said if I were a betting man, I'd tell you that more often than not it'd be safe to wager that regardless of their standings that Nintendo is always going to do just fine. Turns out that for the last 30 some odd years you'd never have lost if you'd bet that Nintendo would be in the green. This year though, you'd lose, but probably not as big as Nintendo has:

The gaming company has posted that for the first half of the fiscal year it has lost an astronomical $926 million dollars. As the article mentions this turn of events marks the first time that it stands to end an entire fiscal year in the red since 1981: the first time in 30 years. Certainly the end of the year loss won't be quite as staggering, with a projected red margin of $264 million, but this is still a very concerning state of affairs considering that it is one of the three powerhouses in the gaming world right now.

The article I've linked points out a couple of the reasons that could be most at fault for Nintendo suddenly floundering: the weak US dollar makes exporting a losing game for the company that normally enjoys getting profits from the foreign currency. The lackluster performance of the 3DS hasn't helped things either, and finally the games are pointed out as one of the reasons that Nintendo hasn't made nearly as much as it was expected to recently.

Now, I'm not a market analyst by any stretch, so I'll leave the currency stuff to those that actually know what they're talking about, but on the latter two: the 3DS and the current state of gaming on Nintendo platforms, I would say that I am at least somewhat qualified to chime in.

I will grant you that the 3DS hasn't been as disastrous for Nintendo as the Virtual Boy, but with the failure of the latter Nintendo was going strong off of the SNES and had everyone drooling over the upcoming system that would turn into the Nintendo 64. While the Virtual Boy was a spectacular failure, the company had a nice soft cushion of dominance over both markets to fall back on. More recently, they aren't nearly so lucky. Sure, the Wii has sold the most consoles of this generation so far, but aside from the huge initial boon the system enjoyed there hasn't really been a huge drive in sales.

The 3DS was supposed to be the next iteration of handheld gaming, but it honestly seems like it has failed to live up to that promise, at least in my eyes. I've said it before, but I believe that it's worth mentioning again that I don't believe that 3D technology, at least in it's current state, has a place in gaming yet; it comes off as gimmicky at best, and completely and utterly unnecessary at worst. Although the platform is solid from a technological standpoint it has to compete against the upcoming Sony Vita and both will have to jockey for position in a market where more and more people are also turning to tablets like the iPad to get their gaming fix for a fraction of the price of a traditional portable game.

When it comes to the Wii, it seems that the same accessibility that made it the initial console to beat is coming back to haunt it. The motion controls that were once the system's strongest selling point haven't really improved gaming and in some cases have made the experience needlessly more frustrating, but more than anything, there just seems to be a lack of genuinely good titles outside of the ones that Nintendo releases itself. I'm struggling to try and think of a third party game on the system that's been a huge success, and that's not a good thing. Sure, Nintendo has more than enough in its own stable in terms of AAA franchises, but it can only make so many at a time, and even those aren't guaranteed successes if mixed critical reaction to Metroid: Other M is any indication.

The future honestly looks just as shaky at this point: the WiiU is already being criticized for it's somewhat mediocre hardware and the next new gimmick that Nintendo is attempting to roll out with it. The company, I believe, needs to heed this loss as a warning, and take some time to re-evaluate its current game plans. Nintendo needs to get back to its core fundamentals of making systems that have loads of strong, must-buy titles, rather than cute bells and whistles that will only satiate for so long before you're left begging for something more substantial.

Now, is this the end of Nintendo? Hardly, but I'd say that it certainly isn't a good omen. I just hope that it's one that they pay attention to and learn from, lest they go the way of Sega.

1 comment:

  1. Nintendo will be in much better shape after the holidays as they have three games from their two biggest franchises coming out. Skyward Sword for Zelda and then two Mario games in Super Mario Land 3D and Mario Kart 7. The two Mario games being on the 3DS, so that will help out tons with 3DS sells. I personally have a 3DS and so far the 3D isn't that great. I mainly play with it off or turned on very little.

    The WiiU is what I would worry about, but Nintendo hasn't really shown are said much about it. Though I do wonder if the casual crowd will stick around for the WiiU which is what really helped the Wii sell so well early on.

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