Thursday, October 28, 2010

Console Post of the Week: Nintendo Earnings

Gamastura has a short but thorough discussion of Nintendo's earnings, and here's an excerpt:
Nintendo today posted a six-month loss of ¥2 billion ($24.7 million) for the period ended September 30, 2010, down from a ¥69.5 billion ($854.5 million) profit in the same timeframe in 2009.

The losses were put down to the strength of the yen, falling hardware sales for the company's existing systems, and the announcement that the 3DS will launch in early 2011, missing this year's holiday period.

It will be interesting to see how the strength of the yen affects Sony's earnings, but there seems to be no question that Nintendo has exhausted consumer enthusiasm for the $199 price point. Given that it's almost four years from launch, with the launch price only $50 more, that's not surprising. There will be a new burst of enthusiasm at $149, and another at $99, but it seems indisputable that the Wii is past its peak.

Given its relatively astounding sales rate, and the insane amount of money Nintendo has made from the console, I don't think that's a particularly damning conclusion. 

In a regular console cycle, Nintendo would start touting a replacement soon, and enthusiasm would naturally regenerate. With the 3DS launching in February/March of next year, though,it's hard to see how Nintendo could possibly launch a new console in the 2011 holiday season.

That means, unless Nintendo wants Wii sales to completely flatline, that price cuts are coming.

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