I'm confused about why Nintendo is losing so much money

#1NotChris_HansenPosted 7/29/2011 9:32:40 AM
I don't get it. The 3DS isn't selling that badly and up until now they weren't selling at a loss. The technology is old and shouldn't cost them much. Their games don't seem to have massive budgets or anything like that. They don't spend much on advertising. Do they just waste everything on R&D?
#2NikLinkPosted 7/29/2011 9:37:07 AM
NotChris_Hansen posted...
I don't get it. The 3DS isn't selling that badly and up until now they weren't selling at a loss. The technology is old and shouldn't cost them much. Their games don't seem to have massive budgets or anything like that. They don't spend much on advertising. Do they just waste everything on R&D?

The 3DS isn't selling too badly, but well below Nintendo's expectations. Same for software sales, since the 3DS is still waiting for all the good games to come out and the Wii's software lineup might just as well be nonexistent. So basically, Nintendo is losing money on all fronts. That's why they've made the move to slash the 3DS' price.
#3narutogod22Posted 7/29/2011 9:37:24 AM
They can afford it, seriously nintendo is the only company so far to actually make more money than sony and microsoft combined. and look at the DS too. This is from Talicus " http://i54.tinypic.com/nx8dqh.png
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#4darkqueenhelbaPosted 7/29/2011 9:38:09 AM
It's a number of reasons. Not just the sales of the 3DS. Obviously those sales are not in their favor, but there are other things going on. Exchange rates, low Yen, Japanese market in turmoil, falling stocks, debt crisis, etc.
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#5gunstarzPosted 7/29/2011 9:53:40 AM
Software sales count for Nintendo as much as hardware. So with Wii sales slowing they ideally needed to pick up lost revenue with 3ds.

Add to that the knock on affect of people spending less on luxury items over the past couple of years. They may be sat on a pile of cash but projected sales still have to be met to keep shareholders happy.

I personally believe that a post Christmas release date mixed with bad marketing decisions has led to this. Couple that with a knee-jerk reaction to Sony's cheaper than expected Vita pricing. They've started advertising and showing the games on tv here in the UK now instead of pushing the 3d so things will pick up. People are still surprised at the power of the system when I show them DoA (that's my "check the graphics out" game), then they start to show an interest.

Finally, guageing the reaction of the industry and media, then pricing based on that was a massive mistake.
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