After failing to acquire a larger share of the market,
Nintendo (OTC:
NTDOY
) has lowered its full-year profit and sales forecasts. According
to
Bloomberg
, the Japanese game developer had previously expected to post a
profit of 20 billion yen (roughly $250 million according to
xe.com
's currency converter), but Nintendo now anticipates a net income
of six billion ($75 million).
The decline is once again being blamed on the rise of
smartphone gaming, but the problem runs much deeper than a shift
in consumer interest. Nintendo has repeatedly squandered every
opportunity to turn its latest handheld game system, the Nintendo
3DS, into a worldwide sensation. Instead of releasing a
cornucopia of appealing games, the company has delayed and
stretched out the release schedule of its most popular
titles.
Nintendo has attempted to fill in the gaps by encouraging
customers to buy games produced by the company's external
partners, which are known as third-party developers. That
strategy has failed miserably. While Nintendo frequently brags
about how the Nintendo 3DS is selling faster than the original
DS, it is highly unlikely that it will ever match the overall
sales of that device. According to
VGChartz
, the original DS -- released in November 2004 -- has sold 152
million units worldwide. The Nintendo 3DS, released in March
2011, has sold 21 million units. While it is not uncommon for
hardware to get off to a slow start, it is hard to imagine a
scenario in which Nintendo can maintain its current sales pace.
Even if it can, it would still only sell an additional 80 million
units (roughly 20 million units every 18 months for the next six
years).
If total sales reached 100 million units, the Nintendo 3DS
would be considered a success. Before Nintendo can achieve that
goal, it has to inspire consumers to buy the hardware. That is no
easy task.
Right now, the world's
number-one selling game
is Nintendo's Pokemon Black/White Version 2. In the past week
alone, the game sold 1.4 million units, bringing the worldwide
total to more than four million units. This would be great news
if this were a game for the 3DS or the forthcoming Wii U, but it
is not. While the new Pokemon game is
playable
on Nintendo's new handheld, it was designed for the original
DS.
By putting its biggest game on old hardware, Nintendo has
shown a lack of faith in its new devices. This may contribute to
further losses at the firm.
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@LouisBedigianBZ
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