BoneStormer
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 Posted: Thu May 22, 2003 3:27 pm
Post subject: More bad signs for Nintendo... and gaming in general? |
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I tried to highlight a few of the more interesting points (since there are so many).
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TOKYO - Nintendo Co. reported Thursday a 37 percent plunge in profits for the fiscal year through March as sales of its GameCube console fell short of the Japanese video-game maker's target in a clear defeat to rival Sony PlayStation 2.
Profits at the Kyoto-based company, which makes Pokemon and Super Mario games, totaled 67.3 billion yen (US$572 million) for the fiscal year ended March 31, down from 106 billion yen the previous year.
Sales totaled 504 billion yen (US$4.3 billion), down 9 percent from 555 billion yen, Nintendo said. Nintendo made 75 percent of its sales overseas.
Since going on sale in 2001, GameCube has taken a sound beating from PlayStation 2, the rival machine from Sony Corp (news - web sites)., which has emerged the global leader in the sector.
As of March 31, 9.55 million GameCube machines have been sold around the world — short of Nintendo's goal of 10 million and far below the 51.2 million PlayStation 2 consoles shipped worldwide so far.
Now, Nintendo is about to face Sony's competition in portable game machines as well, where its Game Boy has dominated. This month, Sony announced it will introduce its own handheld, the PlayStation Portable, next year. It did not show a prototype or give a price.
Nintendo has sold 33.8 million Game Boy Advance machines so far, including 15.7 million in fiscal 2002.
The arrival of a Sony portable is a big threat to Nintendo at a time when it is counting on Game Boy Advance sales and hoping to sell games that link the Game Boy Advance with the GameCube, said Takeshi Tajima, analyst at BNP Paribas in Tokyo.
"Trying to prevent GameCube from dying out is the only strategy left for Nintendo," he said. "When the gap in market share is this great, a rally from behind is virtually impossible."
Nintendo is forecasting even lower profits at 65 billion yen (US$553 million) for the fiscal year ending March 31, 2004. It predicts sales will improve to 550 billion yen (US$4.7 billion).
In fiscal 2002, Nintendo fared better in selling game software than in selling machines.
It sold 59 million games for Game Boy in fiscal 2002, up 26 percent from 47 million a year ago. It sold 46 million games for GameCube, about triple the 14 million in fiscal 2001.
Nintendo officials have said they no longer hope to compete in making more sophisticated machines. They want instead to make fun software, an effort that won't cost as much but can produce profits.
"It is becoming increasingly more difficult to create new and unique games which utilize the full capabilities of new hardware," Nintendo said in a statement Thursday.
"Pocket Monsters Ruby & Sapphire" sold well, proving that Pokemon games remain strong products, it said.
Nintendo stocks, which has slid over the last year, finished up 3 percent at 8,440 yen (US$72) Thursday on the Tokyo Stock Exchange shortly before earnings were announced.
Fellow Japanese game maker Sega Corp. has also suffered from the competition from Sony but managed to turn a profit in fiscal 2002 for the first time in six years. Sega, famous for Sonic the Hedgehog, dumped its Dreamcast console in 2001 and makes games for PlayStation 2, GameCube and Microsoft Corp.'s Xbox.
Sony's game unit is turning solid profits. Sony is also planning to make the game machine a central part of what it envisions as the future network home, where people use mobile phones, Net-linking cars and TVs, as well as the game machine, to watch movies, read the news and exchange e-mail.
story.news.yahoo.com/news...nintendo_1
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Nintendo, Konami Post Decline in Earnings as Audience Shrinks
Tokyo, May 22 (Bloomberg) -- Nintendo Co. and Konami Corp., two of Japan's largest makers of home video-game software, reported a decline in earnings last year, reflecting stiffer competition and a shrinking audience of game players.
Kyoto-based Nintendo's annual group net income tumbled 37 percent to 67.3 billion yen ($573 million) on a 9 percent drop in sales to 504.1 billion yen. Konami had a group net loss of 28.5 billion yen for the 12 months ended March 31, compared with net income of 11.4 billion yen in the year-ago period.
The results from Tokyo-based Konami, maker of ``Beat Mania'' and the ``Metal Gear Solid'' series of espionage games, and Nintendo highlight the dilemma of an industry desperate for new hit titles to spur sales and renew interest in an aging lineup of game players from companies such as Sony Corp.
``The game industry is not a growth industry right now,'' said Shoji Hiraga, who helps manage the equivalent of $2.55 billion, including Nintendo's shares, at Resona Asset Management Co. ``Development costs are too high, forcing gamemakers to get together to share the burden.''
Prior to last year, Japan's video-game market shrank every year since its peak in 1996 as it fought to combat a declining population of young players and general boredom in game quality, according to the Computer Entertainment Supplier's Association. In fiscal 2002, sales rose 7 percent to 317.4 billion yen.
Software Vs. Hardware
Software is proving to be Nintendo's strong point, with game sales for its GameCube console tripling to 46.1 million units in fiscal 2002 from 14.4 million units a year ago.
Nintendo expects software sales to rise 8 percent to 50 million this year. Game Boy Advance hand-held player software sales rose 26 percent to 59.1 million copies from 47.1 million and will probably gain another 1 percent to 60 million this year.
Nintendo hasn't been as lucky with its hardware sales. The company's GameCube already lags Microsoft Corp.'s Xbox in some markets, forcing the gamemaker to find ways to spur sales.
Sales of Nintendo's GameCube totaled 5.76 million units for the year ended March 31, a 52 percent gain from the year-earlier period but 42 percent short of the company's original 10 million unit forecast. This fiscal year, Nintendo expects growth in console sales will slow to 4.2 percent, reaching 6 million units.
Konami's game sales also aren't faring well. Sales at Konami's game software operations last fiscal year fell 2.9 percent to 87.5 billion yen even as the company's overall sales rose 12.4 percent to 253.6 billion yen.
New Revenue Sources
Game software makers have sought other sources of revenue to augment flagging game sales. For example, Konami paid 69 billion yen to buy a majority stake in People Co. from Mycal Corp. in February 2001, becoming Japan's largest operator of fitness clubs.
Gamemakers have also expanded their product lineups to include card games, a greater emphasis on sports-based titles and games designed to be played over the Internet.
Most of the new business areas have yet to revive earnings. Konami, which is also known for a series of music-related arcade hits including ``Dance Dance Revolution,'' blamed its annual shortfall on goodwill related to its fitness purchase.
Sega Corp., which scrapped its Dreamcast console two years ago to focus on making games for growth areas such as sports games, this week reported a one-third drop in second-half profit.
Meanwhile, game designers have been left to revamp older titles with updated sequels or games tied to movies such as ``The Hulk,'' a title for Sony's PlayStation 2 based on the feature- length movie of the same name. Many existing titles are also being released for Microsoft's Xbox.
U.S.-based gamemakers such as Electronic Arts Inc., the maker of ``Medal of Honor'' and simulation game ``The Sims,'' are also attracting Japanese game players.
``Foreign game developers, especially Electronic Arts, are gaining more market share,'' Konami director Toshiro Tateno told reporters in Tokyo. ``Japanese game developers used to have a big market share; such good days can't be guaranteed any more.''
Konami expects most of its biggest-selling titles in the current year to be follow-ups based on previous hits.
Declining Sales
In Konami's case, the company blamed the decline in game sales to the performance of big budget games with higher prices such as ``Metal Gear Solid 2,'' which it said didn't sell as well as expected. Sales of lower-priced games rose.
This year, Konami expects the decline in game sales to continue, eating into operating profit at the business. Konami expects game software sales to fall to 83 billion yen from 87.5 billion yen last fiscal year and operating profit is expected to decline to 12.8 billion yen from 13.9 billion yen.
Video-game players aren't the sole jaded audience. Konami's shares have plunged 37 percent since the beginning of the year, more than 10 times the decline by the Topix index of all companies listed on the first section of the Tokyo Stock Exchange.
Shares of rival gamemaker Capcom Co., which posted a second- half net loss of 2.28 billion yen earlier this month on a 7 percent decline in sales, fell 49 percent in the same period.
Sega's shares have dropped 42 percent since Jan. 1.
``Game software developers must pay more attention to the overseas market,'' said Takashi Oka, an analyst with UFJ Tsubasa Securities Co. ``In order to recoup increasingly high game development costs, they must do well outside Japan.''
Drumming Up Sales
Other gamemakers may have more to cheer about.
Namco Ltd., the maker of ``Pac-Man,'' this week posted a more than threefold gain in second-half profit on stronger-than- expected sales of a traditional Japanese drum game designed for Sony's PlayStation 2 video-game console.
Group net income at Namco, also Japan's No. 2 arcade maker, totaled 2.8 billion yen, or 48.9 yen a share, in the six months ended March 31, compared with 801 million yen, or 14.53 yen, a year ago. Sales fell almost 2 percent to 81.4 billion yen.
Bandai Co., Japan's largest toymaker, had a 10 percent gain in second-half profit, aided by sales of its ``Dragonball Z'' video-game software for PlayStation 2.
Group net income at Bandai, also Japan's third-largest game software supplier by volume, totaled 5.6 billion yen in the six months ended March 31, compared with 5.08 billion yen a year earlier. Sales rose 11 percent to 131.10 billion yen.
``The game business is hit or miss,'' Bandai director Shin Unozawa told Bloomberg News in an interview. ``Even after posting good sales like last year, you can't afford to expect another good year. We have to be very conservative.''
 Get out, and take your Sacagawea dollars with you! I'll give you 'til three. One! |
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BoneStormer
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Posted: Thu May 22, 2003 3:52 pm
Post subject: Re: More bad signs for Nintendo... and gaming in general? |
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I'm not here to knock Nintendo, but to knock the direction of gaming in general. Maybe I'm just one of those 'jaded' gamers. 'Tuff.
What stuck out at me in that second story were the games that have done well for companies recently. Sequals, rehashes, movie/comic licences, ect. is where the money is coming from. When some 'drum game' and DBZ are saving companies' asses while MGS2 sales were 'weak', that has got to set off a red flag. It says Nintendo games have done well, but when games like Spongebob outsell Eternal Darkness, well, that's not good either. The only Sega game that has done really well has been well known Sonic. And based on E3 and "Atari" shipping 4 million copies of Matrix, this doesn't look to change anytime soon. Plus with PS3 trying to become more then just a gaming machine (which in of itself is not a bad thing), it could just worsen the problem.
Could we be nearing a bust of '84 where crap ass sequals and licenses flooded the market. Is the next ET around the corner to crash the gaming market? Or has gaming become to mainstram for that to happen? Instead maybe we can get some good, fresh 'rehashes' or good license games for once. Or maybe the overall weak economy has finally affected the game market and as soon as it rebounds, all will be well again?
It's not all bad. The current state isn't really 'bad' even, just the hints that it could become bad are appearing. And yes my most wanted game is a seuqal (H-L2). It's encouraging to see Nintendo say they want to focus on 'fun' games rather then technical prowress, but I don't like the idea of them coming out with a 'cheaper' system that isn't "sophisticated" as the rest. Their games deserve better, and we all love eyecandy.
If gaming does continue this 'mainstream' trend of pumping out slick licensed games and games hyped with their 'coolness' factor. There is no way Nintendo can stay alive in the hardware business. Unless they can give their image a MAJOR overhall.... but good luck with that. It's hard to break a 20 year old image. But with Nintendo's focus already seemingly behind GC2, who knows.
Get out, and take your Sacagawea dollars with you! I'll give you 'til three. One! Edited by: BoneStormer  at: 5/22/03 3:32:20 pm
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nbrid
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Posted: Fri May 23, 2003 2:39 am
Post subject: Re: More bad signs for Nintendo... and gaming in general? |
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*sits and comtemplates the situation while furrowing his brow*
As far as sophisticated game machines are concerned, having a set top box that can do everything AS WELL AS play videogames does not interest me. I'll buy a PS3 for the games if I feel the need to. Same with whatever NeXtBox is going to be. Features like a built in hard drive, internet access, and USB ports can add to new gameplay features. Since when does a game machine have to be a sophisticated computer that uses your TV instead of a monitor? Hell, slap on a VGA adapter and you've got one right there. It seems the phrase "game console" is going to disappear soon. As long as Nintendo keeps making their own systems and new games, I won't have much reason to complain. That's not saying I only buy their games, but about half of them are at least published by Nintendo.
Alright Im probably a little jaded myself. Though it's nice to see all these new features coming to game systems, I'd like to see some games that intend to utilize all this great stuff. Seeing so many crap games, namely dragonballZ, get bought is just sad. Before gaming was mainstream people bought games because they had a blast playing it at a bowling alley in between turns. Games based on movies were just too crappy or far off from the direction of the film to be taken seriously. Nowadays better graphics draw more people in so they can play as their favorite actor or horribly drawn misfigured prepubesant spikey blonde-haired big forehead midget. Maybe I latch onto Nintendo games and next gen remakes because I remember a simpler time? Initially, I probably do, but these games just tend to be more fun in the end. I have nothing against a licensed game being good, but they shouldn't be allowed to sell more than anything out there.
I guess Im going on numerous tangents right now and have no business-like strategy to mention. Then again...how about Sony and Microsoft make their extremely advanced new consoles and then make some GAMES to use them to their fullest capacity. I dont want to see Gamestop becoming an "entertainment stop" that ends up merging with Best Buy and finally bought out by Walmart which will be the modern day equivalent of a medieval merchant town. Games shouldnt become an afterthought. As for Nintendo, I've got no problem with them making a machine that only plays games BUT they really have to loosen up. Theyve made a little progress but theres plenty more to be done. Make a new magazine that comes with demo discs, push 3rd parties to make online titles until you get your own service up and running*, forget about selling purple systems (the dream is over), spend more on marketing other games besides the big ones, put more 3rd party games in game store kiosks, build a game boy player into the next console. I really cant think of anything to say about trying to catch up to PS2. Like that guy said, it's impossible at this point in time. They just need some luck and about 10 MTV promotions.
*I read somewhere that Nintendo is working on creating a network to handle online games without costing the consumer too much money. It could come out before "GC2." |
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