Russ Pitts: Last week's news was tragic for Nintendo: Profits for its fiscal first half were deeply in the red to the tune of $926 million.
I've been warning about this for some time. Nintendo has been all about the handhelds. That's where the bulk of their profits come from. The Wii did well but the bread and butter of the company has always been handhelds. The Gameboy did well, the GBA didn't decline until the DS replaced it - but the DS started it's slide coincidentally (or not) the year after the iphone hit and the 3DS might do alright, but it's not close to replacing what's been lost with the DS taking a hit. Few need a dedicated handheld when smartphones play games just fine and most have their smartphones on them at all times anyway - so the next gen of dedicated handhelds, both from Sony and Nintendo have an uphill battle ahead of them. The difference is Nintendo made the majority of their money from handhelds these past few years. Sony's primary business isn't even the game business. Nintendo has much more to lose. I don't think the 3DS or even the Wii-U is going to save them. The handheld market has changed dramatically, and the Wii-U already looks to be a disaster in the making with it's one, ipad like controller that only one person at a time can use (a nightmare for families with multiple children) and graphical capabilities maybe on par with existing consoles? Why on earth would anyone buy this and not one of the existing, established consoles for cheap? No wonder Nintendo have already slashed their earnings forecasts to 27 year lows. They've painted themselves into a corner. Let's just hope they can figure a way out before their cash reserves are eaten up.
Its a lot more complex than just "3Ds isn't selling 30 million a year!THats why they are failing!!" Yen exchange rate and not releasing games. You can't just assume because the 3ds isn't selling(which it is) is the release for losses. The exchange rate and recession is hurting almost every Japanese company. Sony has just lost 300 million to put it in perspective. and yes, sony is hurting a lot right now. Just because you have multiple divisions, doesn't help your losses. We are in a recession. And the other half? This is the biggest drought of nintendo games I have ever seen. Their profits are 80% of games. This is why their profits will more than likely skyrocket this christmas, bring out games and the money comes in.
I think after Luigi's mansion 2, Mario Kart 3D, Mario 3D land they'll do alright.. and I hope that they'll release Wii U as good as they can ..and yes.. please release it, so it can support 4 of those new controllers + new metroid HD :)
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