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EoD - N64 love

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GN Podcast #476

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EoD - Console wars

EoD - Why no 'New'?
 

Pachter compares DS to 3DS sales, shows how the impact overall status of Nintendo

Many of you point out that the 3DS is selling better than the DS at a similar point. That's true, but the DS was always profitable, and the 3DS is not. Also, the DS saw sales go from 8.8 million units in its first four quarters to 18.0 million its next four, to 20.2 million in its third full year; I'm pretty confident that the 3DS will not get to 20 million units, but even if it did, it would generate little profit from hardware. Keep in mind that the DS redesign to a lite version boosted sales, and there was little competition for 12 year-old and older from smart phones and tablets. Now, parents who can afford it are opting for Kindles, iPads, and smart phones for their teenagers, and the more casual of those are perfectly happy playing Angry Birds and putting their DS or 3DS into a drawer.

The important point is that if 3DS sales level off at 15 million and Wii U sales level off at 8 - 10 million, software sales will be much lower than they were in the past. If Nintendo doesn't make a profit on hardware, they can't afford to cut prices further. If they do cut price, it will likely occur as their manufacturing costs come down, but I don't expect big hardware profits in the foreseeable future. They are stuck with software profits, and at current sales levels, they are unlikely to make an overall profit from software. - Michael Pachter
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32 total comments (View all)
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18 Feb 2013 20:57

Aiddon wrote:Pokemon will rock socks off when it releases this fall. That's almost guaranteed to start an uptick in sales.


I didn't realise you're an expert in analyzing the industry with years of schooling.

Or does that logic only apply when criticising Nintendo?...
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Anonymous
18 Feb 2013 20:58

Realized he was talking about yearly sale. Still ridiculousl though. XBOX 360 has averaged 10 million sales a year as of the end of 2012. Clearly it is a failure since it never even reached the 3ds's current average of 15 million a year. Plus I'm sure the 360 was sold at a greater loss than the 3ds ever was and was sold at a loss for more itme. Ohw ait, it's not Nintendo so it doesn't count. Even if 3DS doesn't sell as much as DS, it wouldn't make it a failure.
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18 Feb 2013 21:03

cbbomb wrote:
Aiddon wrote:Pokemon will rock socks off when it releases this fall. That's almost guaranteed to start an uptick in sales.


I didn't realise you're an expert in analyzing the industry with years of schooling.

Or does that logic only apply when criticising Nintendo?...


Or you can just look at history, fool. Pokemon has ALWAYS been one of Nintendo's biggest franchises sales wise and has almost always brought with it an uptick in sales of their handheld systems. Sorry I that I have to be mean and use COMMON FREAKING SENSE on you
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Anonymous
18 Feb 2013 21:09

They are unlikely to generate a profit? Doesn't this fly in the face of facts which show that Nintendo recently turned a profit?
User avatar
18 Feb 2013 21:13

Pachter every few days: "Blah blah blah, Nintendo doomed, blah blah blah, iPad, blah blah, Angry Birds."
User avatar
18 Feb 2013 21:38

He just forgot something... The original DS doesn't had an online store. The Nintendo eShop is very promissing in terms of profit. Gunman Clive is a real proof that a games dedicated handheld can bring a lot of money for devs. And so for Nintendo.

Nintendo is now hiding their results on the eShop, but you can see some sort os information of good results sometimes.
User avatar
18 Feb 2013 21:44

Koopzilla wrote:Pachter every few days: "Blah blah blah, Nintendo doomed, blah blah blah, iPad, blah blah, Angry Birds."


"...blah blah blah facebook with mother."
User avatar
18 Feb 2013 21:49

'Many of you point out that the 3DS is selling better than the DS at a similar point. That's true, but the DS was always profitable, and the 3DS is not.'

What a BS statement. Here's that'll never come from Pachter's mouth:

''Many of you point out that the Xbox / 360 / PS2 / PS3 is selling better than the Gamecube / Wii at a similar point. That's true, but the Gamecube / Wii was always profitable, and the Xbox / 360 / PS2 / PS3 is not.'
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18 Feb 2013 22:00

But Pachter....profit isn't everything. It never is in the first few years of a console's lifespan. Gamecube turned a profit, but that didn't stop it from being one of the biggest disasters in Nintendo's history. It only old something like 22 million consoles in it's five year life span, and was nearly matched by the newcomer Xbox, which lost LOADS of money, but certainly ought to be considered a success for one simple reason: it gave Microsoft a strong foot hold in the console market.

3DS, likewise, is using a low price to obtain a foothold better then the original DS did, in a market with much more competition then the DS had. It's establishing a userbase that will buy games and give Nintendo more money in the future, which in the game industry is the MOST important thing about a console. This is why Sony, even when it was market leader, sold it's consoles at a loss: to establish a userbase they can sell games to. It's true, Nintendo has always sold their consoles at a profit until now, but the only time that actually worked out for them was with the Wii, and this was only after their competition went insane and took "expensive console + losing money on every unit sold + ???? = PROFIT" to a ridiculous extreme. Aside from Nntendo, consoles have typically played the long game, taking short term losses for long term profits. What Nintendo has done here is the exact same thing, and while they aren't making as much money off the 3DS compared to the DS, they are still establishing the kind of userbase that will guarantee greater profits in the future, especially given that 3DS games have yet to be successfully pirated, unlike the DS. How does he not understand this?

It is certainly preferable to obtain a profit from day one. Frankly, I think the Wii has proven that a console maker doesn't NEED to sell at a loss to subsidize a strong early fan base, and it's a lesson I hope at least Sony takes to heart, given that they can't exactly afford another loss like the PS3 on their next console. But at the same time, profit should never be the only way one judges a console's success, especially in it's first few years. For a console, user base is key. User base is king. And if a console has to choose between one or the other, it should always choose a larger user base, because in the long term that is what will help a console attain massive profits. A large userbase means more third party support, it means more people who will buy future games, and that means more profits. And if 3DS continues to outpace the DS, then it also stands a chance of out pacing the DS's software profits, especially given the difference in piracy between the two systems
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18 Feb 2013 22:32

Reading what this guy says about anything reminds me of the lols I have reading tabloids in the checkout line.
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18 Feb 2013 22:39

This is complete Bullshit. Pachter is wrong. Nintendo has been making a profit on the 3DS since September.

And Monster Hunter 4, Pokemon X & Y, and Mario Dream Team, are not even out. Nintendo will reach all their goals when Pokemon comes out.
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18 Feb 2013 22:41

Not to mention, there is no way Pachter has access to Nintendo's eShop sales. Animal Crossing New Leaf has sold almost 1 million units digitally. There is nooooo way the DS is making more money than the 3DS now because of eShop.
User avatar
18 Feb 2013 23:04

Pokemon release this October is super effective in making Pachter look like a fool! 3DS is going to win the holiday, and pretty much there after. All 3 consoles are going to pale in comparrison to the 3DS in the coming years.

Why? Because it's affordable, still has high end graphics, and unlike Vita, is actually supported with games.
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18 Feb 2013 23:42

A few things he doesn't realize:

1. The 3DS recently became profitable, not by much, but at least it's something.

2. Nintendo is looking at the long-term success of the Wii U. Too many companies and analysts only care about the short-term sales and profits ("teh Wee Yoo iznt selling gud in Jannywerry! Nintendo is teh duumed!"). The most important thing in the console industry is long-term success; it's what made the PS2 the best selling home console in history at 150 million units.

3. People don't care about monthly sales data. Does anyone remember how much the SNES sold during the month of May 1992?

4. PS3 and Xbox 360 generated huge losses for both Sony and Microsoft, but that hasn't deterred those companies from their long-term goals of being the leaders of home multimedia entertainment.
User avatar
19 Feb 2013 00:26

Parents are buying their kids $500 phones instead of the less expensive $170 3DS system... because they can't afford it...? Is this guy THAT stupid?
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Anonymous
19 Feb 2013 03:20

3DS is blowing up around here. 10 straight days of multiple spot passes per day.
User avatar
19 Feb 2013 03:29

RMC, I love you man, but too much Pachter coverage. I understand if you feel you need to post articles about him, but 3 in a row? Just one man, please.
User avatar
19 Feb 2013 03:37

nuckles87n wrote:But Pachter....profit isn't everything. It never is in the first few years of a console's lifespan. Gamecube turned a profit, but that didn't stop it from being one of the biggest disasters in Nintendo's history. It only old something like 22 million consoles in it's five year life span, and was nearly matched by the newcomer Xbox, which lost LOADS of money, but certainly ought to be considered a success for one simple reason: it gave Microsoft a strong foot hold in the console market.

3DS, likewise, is using a low price to obtain a foothold better then the original DS did, in a market with much more competition then the DS had. It's establishing a userbase that will buy games and give Nintendo more money in the future, which in the game industry is the MOST important thing about a console. This is why Sony, even when it was market leader, sold it's consoles at a loss: to establish a userbase they can sell games to. It's true, Nintendo has always sold their consoles at a profit until now, but the only time that actually worked out for them was with the Wii, and this was only after their competition went insane and took "expensive console + losing money on every unit sold + ???? = PROFIT" to a ridiculous extreme. Aside from Nntendo, consoles have typically played the long game, taking short term losses for long term profits. What Nintendo has done here is the exact same thing, and while they aren't making as much money off the 3DS compared to the DS, they are still establishing the kind of userbase that will guarantee greater profits in the future, especially given that 3DS games have yet to be successfully pirated, unlike the DS. How does he not understand this?

It is certainly preferable to obtain a profit from day one. Frankly, I think the Wii has proven that a console maker doesn't NEED to sell at a loss to subsidize a strong early fan base, and it's a lesson I hope at least Sony takes to heart, given that they can't exactly afford another loss like the PS3 on their next console. But at the same time, profit should never be the only way one judges a console's success, especially in it's first few years. For a console, user base is key. User base is king. And if a console has to choose between one or the other, it should always choose a larger user base, because in the long term that is what will help a console attain massive profits. A large userbase means more third party support, it means more people who will buy future games, and that means more profits. And if 3DS continues to outpace the DS, then it also stands a chance of out pacing the DS's software profits, especially given the difference in piracy between the two systems


Exactly! How does an 'analyst' like Pachter not see this?
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Anonymous
19 Feb 2013 03:53

As long as when the Wii U is being replaced with a new console that the Wii U made a profit does it really matter if it took 1-3 years in a 5-6 year system lifespan?
User avatar
19 Feb 2013 04:35

sdsichero wrote:RMC, I love you man, but too much Pachter coverage. I understand if you feel you need to post articles about him, but 3 in a row? Just one man, please.


I agree. I could understand if it was 3 quotes consolidated into one post, but this is just ridiculous. It's like he's trying to make people rage to get page hits.
No Avatar
19 Feb 2013 08:51

Super Missile wrote:3DS is blowing up around here. 10 straight days of multiple spot passes per day.



Where is here?
No Avatar
19 Feb 2013 10:49

Reading Pachter's gibberish makes me want to go out and buy Nintendo hardware and software. I get the feeling he and others are purposely trying to talk the systems down, such as when he claims he's talked to a lot of publishers who are skeptical. Sure, I bet they are, especially after hearing him talk.

I went out and bought a 3DS XL this past weekend, and will pick up the WiiU ZombiiU bundle as soon as my wallet recovers.
User avatar
19 Feb 2013 14:12

If he gets paid to give his opinions, what makes you think he won't get paid to give DIFFERENT OPINIONS? He has no place in the news anymore. I don't know why RMC legitimizes his nonsense.

But.. I guess I like seeing the lively-hood of this site on these posts lol

He thrived over the speculation of Nintendo's consoles, and we ate it up because what else did we have? But now? He has nothing, and it shows. He is useless
No Avatar
21 Feb 2013 16:36

Aaronrules380 wrote:Realized he was talking about yearly sale. Still ridiculousl though. XBOX 360 has averaged 10 million sales a year as of the end of 2012. Clearly it is a failure since it never even reached the 3ds's current average of 15 million a year. Plus I'm sure the 360 was sold at a greater loss than the 3ds ever was and was sold at a loss for more itme. Ohw ait, it's not Nintendo so it doesn't count. Even if 3DS doesn't sell as much as DS, it wouldn't make it a failure.


Yeah I similar answered him in Neogaf, "If you talk about profits I would be more worried for Sony and Microsoft" the Patcher statement is ridiculous every company even smartphone makers would like an install base of 30 millions for their products who is huge and still the 3DS doesn't even have 2 years, it's true that Nintendo has problems with the 3DS in the west but is not like they can't recover, the content the 3DS has in Japan is not the same as we have in the west, 3DS in Japan is much more appealing, the 3DS only needs more content in the West and still the 2012 numbers were great considering the lack of appealing content the last winter.

Also in the last consumer surveys the 3DS is in the top 5. My conclusion is that many are still not 100% convinced to buy a 3DS, if Nintendo release a new 3DS revision like they normally do each two years in handhelds since the GBA, that would be boosts the sales a lot, considering that the second DS revision was the big hit.

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