The Tendo Project – Daily Nintendo News

Satoru Iwata gives a detailed and humble explanation about the 3DSs price cut and takes a pay cut

As is customary after a quarterly report, Nintendo has held an investors briefing meeting the day after. Normally during an investors briefing Satoru Iwata shows off a bunch of slides and information regarding the statements and talks up Nintendo. However, it’s not a normal time for Nintendo - sales are down and they’ve just announced a massive price cut for their flagship product, the 3DS. Needless to say, things aren’t going to well for Nintendo.

No, at this investors briefing Satoru Iwata didn’t show off any new information, in fact, all he did was talk at length about Nintendo’s decision to cut the price of the Nintendo 3DS and answer questions from investors. Iwata’s speech was a humble one in which he asked his own question, "Why does the company have to make such a drastic markdown now?".

Iwata said that "First of all, we have made the decision to markdown the Nintendo 3DS because we recognise that the current situation surrounding the system is different from that before the launch and immediately after the launch. Having strong momentum is very important for game platform businesses. Once momentum is lost, great power is needed to change that trend."
You see, Iwata and Nintendo really want the Nintendo 3DS to be the successor to the Nintendo DS and to do that they had to take drastic action. But why now? Why not closer to the holiday sales period which is when we all know things sell great?

"Since we will carry out this markdown [price reduction] in a period when Nintendo 3DS does not have such anticipated titles as in the year-end sales season, some seem to have interpreted it as a hasty move.

It is true that a great portion of our sales and profits are generated during the year-end sales season. If we just focused on maximizing the impact of the markdown, it might make more sense for us to do so when a number of anticipated titles are to be launched. In fact, thinking in that way must be the norm, and a number of people must have anticipated that we would make the markdown during the year-end sales season or in fall this year. However, there are some specific reasons why we have decided to make the markdown at this time.

First, since the launch of Nintendo 3DS, one of the things we have learned is that it has taken longer than we had originally expected in order for the appeal of this product to widely spread. We feel that those who have experienced the system appreciate its attraction, but this appreciation has not necessarily been expanding at the speed which we had expected. For us to maximize the effect of the anticipated titles of this year end, it is necessary to greatly expand the installed base (before the launches of the anticipated titles) so that the appeal of the new software will be able to spread to consumers in a short period of time. Without creating such a circumstance, we would not be able to realise explosive sales in the year-end sales season. This is one reason for the markdown."

Basically Nintendo wants the Nintendo 3DS in the hands of consumers now, not just to sell it to them but so they can spread the good word about the 3DS before it comes to the holiday season. But there’s another reasons too: "We thought that eliminating the concerns of future hardware expansion early on would make a great difference to how retailers and software publishers will allocate their energies." Basically if the Nintendo 3DS isn’t selling, retailers won’t stock or promote and game companies won’t make games for it. Something we’ve already seen happening with the cancellation and delays of several key titles.

Iwata said he knew that this price reduction so early would mean that their profit and loss statements are well and truly in the red and asked that investors give him at least four months to turn in around. He also blamed himself for what’s happened to the Nintendo 3DS and so has given himself a 50% pay cut and a pay cut of anything between 30% and 20% for people on the director boards as well. "For the management to show its accountability for the level of the operating loss of this time and the prospect of no interim dividend, we decided at the directors’ meeting yesterday that we would reduce the compensation we will receive as the directors of the company." Very humble indeed. He also feels bad about the disappointing the fans. "I feel greatly accountable for having to make the markdown shortly after the launch, for having damaged our consumers’ trust". So it’s not just the bottom line he cares about, he cares about the people who had bought the system early and feel down abbout it.

Nintendo are serious about not giving up on the Nintendo 3DS. Yes it hasn’t sold well and they know it. They’re to blame and they’re taking the steps to turn it around - it’s going to cost them a lot of money and they’re asking investors and fans to stick with them.

Nintendo does it’s best work when it’s against the wall, so let’s see what they can do. Satoru Iwata’s entire speech can be read on the Nintendo Japan website (it’s in English, so don’t worry) so if you call yourself a fan of Nintendo you owe it to yourself to have a read.

Source: Nintendo.co.jp

Nintendo stock plunges 21 per cent, Yamauchi loses a ton

Nintendo’s stock has hit a new five-year low on the back of the news of a worldwide price drop on the 3DS and a massive profit forecast slash of 82 per cent.

Bloomburg Japan reports the ¥25,000 to ¥15,000 price cut ($100 cut in Australia) on the 3DS now means the system is being sold below cost. Nintendo president Satoru Iwata says the extreme measures are necessary to improve sales of the not-so-hot handheld. Mr Iwata also says he has taken a 50 per cent salary cut in light of Nintendo’s poor performance. But his salary cut is likely to be nothing compared to the loss suffered by former Nintendo president Hiroshi Yamauchi. Bloomberg reports Mr Yamauchi, who owns an estimated 10 per cent of all Nintendo shares, may have lost as much as $500 million in a single day of trading. Sure, that means he still has a fortune of $4 billion, but now he’ll only be able to travel in a fleet of yachts rather than an armada.

Sound out in the forums about what you think this will mean for Nintendo. Are they running scared now due to the poor reception to the Wii U and lukewarm 3DS sales? Remember Sony have priced the Playstation Vita aggressively against the 3DS so things will sure be interesting this Christmas.

Source: Bloomberg

A slump in demand for the 3DS is among the reasons for the downgrade

Nintendo has lowered its profit forecast for the financial year ending March 2012 by a whopping 82%. The companys original estimate was 110 billion yen, but has now revised the figure to 20 billion yen (about AU$230 million). Also, for the 6-month period ending this September, Nintendo expects to record a loss of 35 billion yen, originally forecasting a profit of 18 billion yen.

Nintendos reasons for the revisions are a stronger-than-expected appreciation of the yen, and with 80% of its sales coming from outside of Japan, the company has been severely affected. a downturn in sales performance, and the recent price drop of the 3DS worldwide, which is as much as 40% in Japan after only 5 months since release.

Read the title of this article and this picture makes sense

Looking at hardware, Nintendo now expects to sell 12 million more Wii consoles (previously 13 million) and 9 million DS consoles (previously 11 million) by March next year. The forecasted figure for 3DS consoles remains unchanged at 16 million. Wed like to point out that in the first three months of the financial year (April to June), 700,000 3DS consoles were sold…and Nintendos expecting 15.3 million more sales in the next nine months. Make of that what you will.

The software sales forecasts for the Wii and DS have lowered but not by too much so I wont go into detail. However, along with the crazy hardware sales forecast for the 3DS, there is also an increased software sales forecast for the system, up to 70 million from 62 million. Nintendo also suffered operating losses in the last three months compared to gains last year. It has attributed this to the exchange rate, costs associated with advertising the 3DS, and costs related to research and development for the upcoming Wii U console.

Source: Andrisang

Nintendos never dropped the price of anything so quick, should we be worried?

Nintendo yesterday dropped the most extreme price drop on a console in recent history. A mere four months after launch the Nintendo 3DS has dropped $100, Nintendo is in trouble at the moment and they need the 3DS in people’s hands. Nintendo’s also got more competition on the way with the Vita due out later this year, its reign of supremacy in handheld space is also under threat from smartphones and Apple.

There’s a lot to talk about, lots of things in play so to help sort it all out we’ve got Mark ’King of Scotland’ Serrels to get to the bottom of it.

Mark: Let’s get straight into it – the 3DS price drop. What’s your general opinion of it? Good move? Sign of weakness? The end of the world as we know it?

Vook: The drop itself really isn’t a surprise, they had to do something with the 3DS, it just wasn’t moving as Nintendo’s latest sales reports showed. What is a surprise is that it’s a whole $100 – that’s a ton of money for a four month old device. As we know, Nintendo don’t like dropping the price of anything, but they want and need the system in people’s hands to sell it and, well, they had no other choice at this point.

Mark: We talked about this before, but while folks embroiled in the day to day business of video game news have interpreted this as a massive sign of weakness on Nintendo’s part, the mainstream audience this price drop is obviously targeted at won’t see things the same way. It may just be the encouragement parents need to pick up a 3DS for their kids at Christmas, or for Nintendo fans waiting to take the plunge.

I think the real issue is that Nintendo, with the 3DS, hasn’t really changed its strategy, or evolved its device properly to adjust for the new ways in which we use handheld devices. I’ve mentioned before that my 3DS is literally gathering dust and part of the reason for that is a lack of quality games, obviously, but another is the fact that there is simply very little space in my life for the 3DS. When I bought my DS it was pre-smart-phone. It provided this function I couldn’t live without. Now? It’s a luxury.

I guess my real question is – will the price drop have an impact? Or is the 3DS a device that people simply don’t want or need?

Vook: It is a massive sign of weakness for Nintendo. Nintendo sees price drops as a sign of weakness and a lack of quality. Iwata himself has said he personally doesn’t like them at all – so for Nintendo to do it, they have to be hurting and they are.

The 3DS wasn’t going to sell at the current price point, it was just too much. It’s just the sort of price that’s needed for Christmas, it’s now cost relative to a DS and it’s the ‘latest and greatest’. $350 was too much for the mainstream, but even the core audience held back – a lot of the guys on my forum haven’t picked up a Nintendo 3DS either, so it’s not just a mainstream problem – it’s always been about the cost and, as you mentioned Mark, games.

Quickly on the games issue – there has been a severe lack of good games on the system but I think people are being a little short sighted on this. By the end of the year we’ll have Mario Kart 7, Super Mario 3D Land, Starfox 64 3D and more – time is going to fix this problem. It doesn’t help us, the people who already have it – we want games to play on it right now, not three months down the track.

And there’s no doubt that smartphone gaming is infringing on the Market space for portable consoles, people’s phones are a need item every day and they have it on them at all times. A portable console means another thing in the bag or pocket and since you don’t need it on a daily basis it can be left at home. There’s also the cost factor, games are cheap or even free on the App Store. But that’s another problem for another time.

So after all that, to answer your question – I think people want a 3DS, but they’ll never need one.

Mark: Smartphone gaming is just an incredible area of growth for third parties, while we’re starting to see publishers get cold feet on the 3DS – games being cancelled, delayed, de-prioritised. A price drop is all well and good, but what the 3DS really needs is games. Not the promise of games, but games that exist right now, and can be purchased and played!

We were discussing the price drop in the office and Seamus mentioned that while Nintendo’s commitment to quality in the face of cheap iPhone games is noble, they have to walk the walk. I wouldn’t pay the iPhone premium price of $12 for games like Steel Diver, let alone full retail price Nintendo is asking for.

Handheld gaming is in a massive transition phase at the moment, and I’m beginning to openly wonder if the 3DS really has what it takes to compete. It’s not a powerful machine, the touch capabilities are outdated and outside of the 3D (which plenty of people do not like) is has zilcho when it comes to point of difference.

This will sound harsh, and as a big Nintendo fan it hurts to say, but the 3DS is starting to feel like an old fashioned gadget, only four months after its release.

Vook: I don’t disagree with you on that and Nintendo only has itself to blame for that, it let third parties take all the attention from launch and didn’t step up to the plate. Outside of Street Fighter and Ghost Recon the launch quality of many games just wasn’t there, and good games like Pilotwings could have been so much more. Nintendo then didn’t rebound by saying, well you had your chance now here’s three top games in a row. They gave us Zelda four months later and that’s it.

Steel Diver and other launch games are perhaps not the best examples – they are launch games and launch games are always going to be light on content, but perhaps that in itself needs to change. Seamus is right, Nintendo do need to walk the walk but dropping the price of games isn’t the answer. People will still pay for quality titles, what Nintendo need to do is use its back catalogue and diversify what they’re making. Instead of making Game Boy and NES games $4.50, make them $0.99. SNES and GBA Games shouldn’t be $9. Why is Plants Vs Zombies on DSiWare $12.00 when it’s $2.99 on the iPhone? Keep the big titles at $40-$50 sure, Ocarina of Time, Super Mario 3D will be worth that – but have a range of smaller priced games too.

The Nintendo 3DS both hardware wise and software wise isn’t as flashy as iOS or even Android, it’s a heck of a lot better than the DSi was though. It’s an improvement for sure but Nintendo still has a long way to go. The 3DS feels old for sure, especially when you have nothing to use it for, it just magnifies the feeling. Nintendo need to get progressive in the way they do things, they can be that company and push boundaries but they have even tougher competition than ever before. The 3DS hardware isn’t bad, it’s a nice bit of kit – it’s not being used to its potential.

Mark: I think it’s a classic example of what happens when a company becomes successful, rapidly. The Nintendo Wii and the DS were both incredibly successful and with great success comes the need to mitigate risk. Nintendo had nothing to lose, and everything to gain, when they released the DS and the Wii – being on top tends to breed complacency and the end result is a handheld console that has really played it safe.

In addition, the Nintendo Wii continued to sell regardless of the software quality – a handful of brilliantly made, evergreen first party titles appeared to be more than enough. With the 3DS, for a number of different reasons, this is simply not enough. The competition is too strong. I have no doubt we’ll see big spikes in 3DS sales when big first party titles come out, but there is no way we’re going to see the massive consistent, sustained growth that the original DS had.

Vook: There’s no doubt in my mind that Nintendo got complacent. They rode the wave and just kept going until it crashed. The Wii is the best example – like you said they relied on those evergreen titles and never bothered to follow them up or make new titles that got new people buying consoles. The DS’s success won’t ever be repeated and despite the 3Ds outpacing what the original DS was when it started, it won’t be able to hold pace like its predecessor.

For all the money they’ve made in the last generation, Nintendo are now going to be playing catch up. Maybe not in power or hardware but in software, online services and originality. First party titles are going to boost things no doubt, but people are always looking for the next big thing. At the moment, Nintendo doesn’t have one. It’s time for them take stock, use all that money and make something that really kicks the ball out of the park.

I really don’t want to be playing Super Mario Bros on my phone.

So folks, we’re running a poll for to get your thoughts about the price drop but we’d also like to hear what you think about how Nintendo’s doing going forward from there - price drop, games, everything. What do you think?

Any 3DS that connects to the Nintendo eShop before August 12 will get 20 free NES and Game Boy Advance Virtual Console games.

Any 3DS that connects to the Nintendo eShop before August 12 will get 20 free NES and Game Boy Advance Virtual Console games.

Nintendo just announced disappointing sales of its 3DS handheld gaming device, and a discounted sticker price to go along with it. Is an $80 drop and twenty free games enough to build momentum for the tepid gaming device?

Check out today's show to find out, and to also hear about an AirBnB user's home getting completely thrashed, the hubris of Domino's 7x7x7 deal, and our tips for Colin Farrell in the remake of the movie "Total Recall."

The 404 Digest for Episode 870

• Airbnb.com user's home gets completely trashed.
• Nintendo slashes 3DS price to $169.99.

Episode 870

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Originally posted at The 404 Podcast

Sport theme this week, if you own a 3DS that is - otherwise no soup for you

Another week of updates and yet another week of nothing for Australian Wii owners. No Virtual Console and no WiiWare titles - none. Well at least Nintendo is making these things easier to write for me, I only have to tell you about two things this week. How about that!

3DS eShop

Lets Golf 3D (Gameloft, $9.00) - Whats this? An original game on the eShop thats not a 30-year-old Game Boy game? You better believe it. The DSiWare version which came out a while back was pretty good and since Gameloft are pretty much just copying Everyones Golf, it cant be that bad.

3DS Virtual Console

Baseball (Nintendo, Game Boy, $4.50) - We went and did something quite crazy this week, we did a review of the game. So you can get 400 words of me explaining this one very soon. Hint: its not that good anymore.

DSiWare/WiiWare

Nothing, unless you switch your console to the European store, then you can get Successfully Learning German: Year 5 on the Wii, DSi Shop and eShop. GO Series: Portable Shrine Wars and Artillery: Knights vs. Orcs are also on the DSi Shop and eShop. Remember, changing your region on the Wii will mean you lose your Points, but on the eShop it wont.

Nintendo saw its revenue slip 50.2 percent year over year during the company's last-reported quarter, due to slumping hardware and software sales.

Originally posted at The Digital Home

Company will cut the price of its 3DS portable in the U.S., starting August 12. Nintendo is lowering the price of its handheld game device in other markets too.

Originally posted at The Digital Home