Nov 1, 2009

Nintnedo Loses Some Steam

By Andrew Shin

Earlier this week Nintendo Co. Ltd reported that quarterly profits had dropped 52% and as a result has reduced its annual earnings forecast for the year. Their operating profits fell $90 billion Yen (approx. $709 million US) in July-Sept compared to $133 billion Yen a year earlier. This has been a difficult quarter for Nintendo coupled with the declining sales trend that has hit them throughout the year.

One can't be completely surprised by this latest quarterly report as Nintendo hasn't done enough to spark new and heightened interest in their Wii console due to a lack of engaging and exciting game titles. In fact, the only big release in the last few months has been the Wii Sports Resort game that incorporates the use of the new Wii Motion Plus peripheral for the Wii Remote. The other obvious factor in all of this is the the recent price cuts to the PS3 and Xbox 360 consoles. Sony having introduced a new slimmer PS3 for $299 CAN and the Xbox 360 Elite dropping in price to $299 as well has helped both consoles to gain more marketshare with respect to sales. In fact, for the first time since its release, Sony's PS3 outsold the Wii as the top selling console in the U.S. this past September according to NPD numbers. As a result, Nintendo responded by also dropping the price on the Wii to $219 CAN.

To have dominated as long as Nintendo has since the release of the current gen consoles, it's only expected that they would lose some of its lustre. But at the end of the day, business is business for Nintendo and if they hope to recover, many in the gaming industry - both analysts and gamers - feel that Nintendo has to deliver with a solid line up of titles and new gaming experiences that will keep both the casual and core gamers interested enough to spend their dollars.

1 comment:

Clinton said...

Interesting sales data! What a turn of events for Nintendo. Even if they were to continue on this sales dip for the short-term, I don't think anyone would even suggest that Nintendo products are a failure this generation. It's just further proof that what rises will always fall. And maybe it's time for the industry as a whole to reevaluate the market for 2010 and beyond. Can the casual audience be mined indefinitely? Are the big titles being marketed appropriately? Are the small gems being given the right amount of push?

The Nintendo Wii and DS have blown the doors open on a previously untapped demographic and all 3 platform holders have ridden the wave for the last couple of years. I think now is a critical time for developers and publishers to figure out the long-term game plan and hang on to all these new customers... because as hard as it is to believe now, the hot "casual" market could be gone as quickly as it had arrived.

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