Nintendo is doing very well, thank you

That’s in billions, folks — more than all profitable public publishers combined. It won’t soothe your hardcore-loving, first-party heart, however. Via Edge

35 Responses to Nintendo is doing very well, thank you

  1. LocoTank says:

    Really? Wow…it’s kind of hard to believe that chart…it’s a little bit too dreamy…but anyway, it’s cool…

  2. DmNt says:

    WOW! I NEVER knew Nintendo was doing so well!! Reggie has only told us every MEDIA SUMMIT!

  3. Joltman says:

    I’m glad to see Sony is on the bottom of the chart.
    Shows that they really really screwed up.
    Maybe next year they’ll finally be out of the console wars, and we’ll be back to 2 people like it should always have been…

  4. waltermh says:

    nintendo is the best example a company can give about how to run a business.

  5. Joshdad says:

    I don’t understand how a company like EA can actually lose 450 million dollars. I mean, I can see Sony and Microsoft losing money on their consoles, but supposedly they make up for it with their software sales. But a company that only makes software, how do they lose this kind of money. What kind of overhead can they possibly have that would cost this much? I can see if their sales are down, and they have less sales than the year before, but are they actually losing money? Let’s say that they make 200 million in sales in 2006, but in 2007 they only make 100 million in sales. Sure they are down in profits from the year before, but I’m sure that they are still turning a profit.

  6. Jeff says:

    Take 2 is also interesting.

    Somehow selling millions of copies of Grand Theft Auto III on the PSP and re-selling it on the PS2 and GTA: LCS somehow can’t make them money. I’m sure after GTA IV they’ll be in the green… But they can’t release GTA IV more than once.

    Nintendo shows everybody what a better business model looks like.

    Also notice how Eastern devs tend to do better than Western devs, and the Eastern devs that do the worst are the ones that attempt to emulate western devs. This is possibly due to the DS and how other than some Western devs (activision), most of them treat it like a place to dump shit hardware.

    This is the real domination, gentlemen. Who will investors invest in, with one company eating up 8/10 of the market’s profits while everybody else fights over the other 2/10 and complain about graphics.

  7. SSBB fan says:

    It’s proof that NINTENDO IS THE BEST COMPANY EVER.

  8. lyskan says:

    It’s in Billions? but it says MILLIONS on the graph….

  9. benthedorklord says:

    i am skeptical.

    there’s no way sony could have lost one and a quarter TRILLION dollars. do you guys have any idea what a ridiculous amount of money that is?

    i feel like we’re missing something. maybe that’s only software sales or something… i didn’t read the entire edge article because it was like 25 pages long but i really can’t believe this is possible

  10. dlindema says:

    It’s times like these when I kick myself in the pants for not buying stock in Nintendo a couple of years ago. But then again, who saw this coming?

  11. RoyalRook says:

    lyskan says…
    It’s in Billions? but it says MILLIONS on the graph….

    Haha what a freaking idiot.

  12. ejamer says:

    @JoshDad

    One big way to lose mony is buying out companies. It’s really an investment, but shows up as a big loss in the short term. For EA, this might have made a difference:

    http://www.gamasutra.com/php-bin/news_index.php?story=15833

    Another is ongoing development costs. Remember that even “simple” games can take a year or more to develop… so losses taken in one year might result in significant profits later.

  13. Blake says:

    For the graph retarded: $2,594 million is $2,594,000,000 (which is billions).

  14. rdaneel72 says:

    It’s Two-Thousend Million!!!

  15. HelixRocker says:

    @benthedorklord
    Sony lost 1.2 billion dollars while Nintendo made 2.5 billion dollars in profit. Sony’s poor business plan has cost them a billion dollars, that’s smarts! I don’t expect that to get much better, but that’s just my prediction I could be wrong. I just don’t see Sony changing the behavior that got them here, while Microsoft seems to have understood it’s getting disrupted. Only the future can tell I guess.

  16. Jack says:

    Actually, Take Two will only BREAK EVEN with the sales of GTAIV factored in at the end of the year, says the article. I bring that up because someone else above asked how companies like EA and Sony could lose so much money.

    In a general sense, it speaks to the FAIL policy of many publishers today to cater to the crowd that likes $100 million games with big budgets and “immersive” gameplay (which, ironically, usually includes more cutscenes than actual, well GAME play). They blow their wad on releasing these huge games every two years or so, they sell incredibly well for a month, but then they only make their money back (and perhaps a little bit more).

    This chart also makes anyone who says Nintendo is abandoning anyone rather foolish. You don’t make that kind of money catering to one kind of person (in this case, the argument goes Nintendo is now fully committed to the non-existent “casual market”), you make this kind of money making games and having a system that caters to EVERYONE. Case in point, from the article once again, is the fact that many of Nintendo’s “core” games remain in the Top 10 for many, many months, and make it lots of money. This is in addition to Wii Play-type games, which also share top 10 status. Thing is, they coexist, and that’s why Nintendo was able to make more money than almost everyone else combined.

    Think of it this way: If life were as the E3 belly-achers would have you believe, then TV would be a mess. Why? Well, if the complainers were right, which they aren’t, then Hannah Montana on Disney would be the only show and television channel that exists. Why? Because, according to their logic, since Hannah Montana is a mass market kiddie TV show that has immense success, all the other channels would be shut down, because TV is “catering to the Hannah Montana casual market.” Bullshit.

    And to think, Nintendo produced those charts above all without “teh graphics.” How the hell is that even possible?! It’s because graphics complement the game, they don’t define it. If you have a good game, you have a good game! If your argument is that a developer phoned the graphics in, what you’re REALLY complaining about is the game. It’s a subtle distinction, but it goes towards deconstructing this crazy idea that the graphics define the industry, as opposed to the simplest explanation: the games, and how enjoyable they are.

    Nintendo’s systems have the most enjoyable games for the largest number of people. Simple.

  17. Probst says:

    @dlindema

    I know the feeling only I’m kicking myself for not buying more Nintendo stock than I did 😉

  18. Carlos says:

    @Joshdad What kind of overhead can they possibly have that would cost this much? I can see if their sales are down, and they have less sales than the year before, but are they actually losing money?

    NFL, MLB, etc rights are not cheap. to many employees doesn’t help either.

    Sony CAN lose that kind of money because they spend it in the Cell Proc. and the Blue Ray.. Technologies that were too expensive some years ago, when the PS3 was in development.

    And yet we are waiting for the WOW! factor for one PS3 game…. (GTA is overrated, MGS4 is ok.).

    I think Sony and Microsoft think in technology, then it adapts games to that tech, Nintendo in other hand, think in games, and adapt technology to the gameplay.. that is why Nintendo Games, feel like games, while Sony and Microsoft software seems more like Hollywood movies, to many corn-pop, little substance.

  19. Joshdad says:

    @Ejamer
    Thanks, that makes sense.
    I understand that it cost money to make games, but there’s no way that you can spend almost half a billion dollars in overhead, with no profit on software production (and obviously EA sells a lot of copies, especially with it’s sports lines) and stay in business.
    I wonder if it’s really fair lumping EA into this graph if their sales losses are due to buying out another company for 800 million. I mean that’s not really an indication of how their sales are doing.

    I’ve heard it mentioned before, but does anyone know off-hand how much Sony and Microsoft lose on every one of their consoles sold, and how much Nintendo makes on every one of theirs?

  20. deepthought says:

    mo money mo casual

  21. Carlos says:

    Sony 350$ a year ago, $250 today (loss)
    Microsoft, 73$ profit
    Nintendo around 200$ profit.

    This is what i remember

  22. XCWarrior says:

    @Jack
    ::Stands, applauds slowly, waiting for everyone else to realize how brilliant your post was::

    Bravo man. I had something to say, but you said it all right there. Well put.

  23. Jeff says:

    “mo money mo casual”

    One day you’ll have a coherent thought.

  24. SALTYB0B says:

    i dont understand the posistion that microsoft are in on this… :S

  25. deepthought says:

    haha- hey man. take it easy. it’s a joke.

  26. Run line 10 says:

    The EA thing is simple the bet on the wrong team and they bet the farm.

    The HD stuff really is bleeding these guys. I know the other fanboys hate the Wii but with out it gaming would be dead if you looked at this chart. Man this is sad. The hardcore better getting buying the new NCAA HD football game is out! They wanted a platform all to them selves and the guys who listened are paying through the nose.

  27. Run line 10 says:

    @Jack The graphics thing is used the same way it was used in the PC sector. If you want them then you have to pay but before long that’s all your really paying for. I mean who is still playing MGS or GTA or halo or gears? That’s a lot of dust my friend.

    The Wii winning effects the media also because before long they will stop getting paid or compensated for reviews LOL. SONY and MS are big companies they afford to F up. But boy did they mess up?

  28. NinKenDo says:

    This really is an amazingly telling article. What a state this games industry is in… more popular than ever, yet many publishers are deep in the red. I think the key here is as many people have pointed out, in inflating development costs and overhead. 360 and PS3 games sell for $60, just $10 more than last generation, yet development costs per game are substantially more than it was for PS2 and XBOX titles and market penetration is not nearly what it was for the PS2 (although the 360 is leading its younger brother). Nintendo on the other hand anticipated these rising costs and created a system that could produce new, innovative, and exciting games at comparable if not lower costs than last generation. Also crucial this generation is digital distribution, Nintendo dug into their extensive library of quality games and sold them via the virtual console with almost 100% profit, and while Sony and Microsoft are down with the downloadable content they do not have the nostalgia factor, nor the deep wealth of classic titles to draw from (many of which have held up pretty well to the test of time). Nintendo has now pushed into the area of new content with WiiWare and if they could fix the damn storage problem they could be digging into a goldmine.

    I have a feeling that a lot of 3rd parties are going to be jumping on this bandwagon soon, or ramping up their existing production because of the cost savings and profit potential. Titles like Mega Man 9 will rake in huge piles of cash with a minimum spent on development, marketing, and distribution. Not that we’ll have a full 8-bit revolution on our hands, but we will see publishers churning out more simple titles to supplement costs of huge disc based games. And as long as the quality of gameplay remains high us gamers can only benefit from this trend. The industry is evolving and Nintendo is leading the way and making it possible for companies to not only survive, but to thrive with a platform that offers rich rewards to those that can find that sweet spot of high quality at reasonable development cost while reaching the largest audience possible. So far Nintendo is the only one that can do it consistently, but they have clearly laid the groundwork and set the standard.

  29. Joshdad says:

    @ NinKendo

    “So far Nintendo is the only one that can do it consistently, but they have clearly laid the groundwork and set the standard.”

    Nice post, and I agree with this final statement, but I think the question is whether or not Sony and / or Microsoft will follow suit, or will they stubbornly stick to their better graphics means better games motto, no matter how much it costs them. I seriously wonder if we are going to see one of these two drop out of the hardware game, and stick to producing only software. I hope not. I think more competition means better games all around.

  30. HyperSonic says:

    Damn, Nintendo’s doing amazing, then. What are these people buying, with not a Wii in sight in any store? =P

    And, being a Sonic fan as well, I have to mention; Damn it, Sega’s behind. (Understandable, of course.)

  31. Run line 10 says:

    @Joshdad it’s clear that MS nor SONY have the talent to follow suit with 1st party games. I mean look at what they have hyped for the future. it’s looking pretty grim.

  32. Austin says:

    what does the scouter say about Nintendo’s company value

    IT’S OVER NINE MILLION!

    WHAT!? NINE MILLION!

  33. Eolirin says:

    EA bought Bioware for an awful lot of money. That’s likely a big part of why there’s such a huge loss there. They’re also funding at least one MMOG from Mythic, which likely cost them tens of millions of dollars (for comparison, WoW is supposed to have cost 80 mill), and it hasn’t launched yet to recoup costs. Games in production can easily run up costs of hundreds of millions of dollars when you’ve got as many individual projects in the works as EA does. (Or, if you’re Take Two, and sink 100 million into your latest sequel, you can do it with just one game!) So seeing production losses like that usually indicates that they’ve done some big investing and that they’ve had some big titles slip (Spore, some other things), and that their other products are not generating sufficient sales to cover those expenses.

    Overhead in software houses is pretty huge, especially big publishers.

  34. Eolirin says:

    Oh, and actually… I think you guys really need to post the revenue chart for comparsion.

    Nintendo really isn’t doing any better than Sony when we look at those charts, at least in terms of how much their overhead is. Nintendo’s revenue is, however, much higher than Sony’s. They’re both losing roughly 14 billion of their revenue stream, but Nintedo is making 16 billion to Sony’s 13. I don’t think we can really rely on the “cheaper games and more profit per console!” rhetoric when it comes to Nintendo itself looking at these numbers. It may have more of an effect on the third parties perhaps, but Nintendo is spending just as much as Sony, they’re just selling way more.

    If anything, the really amazing one here is Disney. They’ve got nearly twice the return on investment that Nintendo does. Konami’s doing better than Nintendo in that regard too, but still not nearly as good as Disney.

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