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Impact: Hit hardware equals huge profits for Nintendo, but right now the company does not have a hardware hit.\u00a0 So the fact that Nintendo can turn what appears to be a decent profit with declining sales seems to speak volumes about the potential of the traditional video game hardware\/software model.\u00a0 It may also address those commentators that would like to see Nintendo become a multi-platform software provider.\u00a0 DFC Intelligence has been critical of Nintendo\u2019s lack of a strategic vision, but believes that releasing Nintendo IP for other devices such as tablets would not be in the company\u2019s best interest.\u00a0 That being said the fact that Nintendo showed a significant profit does little to address the core underlying concerns.<\/em><\/span><\/p>\nFirst, much of the profit is due to issues around the weak yen and making money off Nintendo\u2019s large pool of current assets.\u00a0 Nintendo has about $10 billion in current assets including nearly $5 billion in cash.\u00a0 That alone is earning significant money for the company, yet the reality is they need to put those assets to better use.\u00a0 The problem Nintendo faces is they need compelling new hardware.\u00a0 <\/em><\/span><\/p>\nThe new 3DS XL is nice but only a baby step forward.\u00a0 The truth remains that the entire 3DS line is not a huge improvement over the DS portable systems.\u00a0 Nintendo needs to look at having a new portable hardware line that can compete more directly with tablets.\u00a0 On the console side there is simply not much that can be done for the Wii U to sell more hardware units.\u00a0 It looks like the Wii U will end up selling less than the GameCube, which was previously Nintendo\u2019s lowest selling console system.\u00a0 The Wii U is simply a deeply flawed system, starting with its dependency on a tablet-based controller that is prone to break and is virtually un-replaceable.<\/em><\/span><\/p>\n![\"3DSXL_MK7-S\"](\"http:\/\/www.dfcint.com\/dossier\/wp-content\/uploads\/2015\/01\/3DSXL_MK7-S.jpg\")
There is a huge opportunity for Nintendo to really innovate in creating new hardware.\u00a0 The challenge is the company could be in a downward Catch-22 spiral.\u00a0 They need to cut costs and focus on the bottom line to appease investors.\u00a0 The challenge is Nintendo needs to come out of its shell and start using its large pool of assets to start to innovate and truly invest in the future.\u00a0 Short-term profits tell us little about how the company will truly be able to get on its feet again and actually move forward.<\/em><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"JAN. 28, 2015 \u2022 For the three month period ending December 31, Nintendo Co. Ltd. posted a net profit of \u00a545.22 billion ($382 million), up from \u00a59.6 billion ($81 million) during the same period last year. By the end of its fiscal year next March, the gamemaker expects to realize \u00a530 billion ($253 million) in […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[168,78,56],"tags":[424,389,6],"_links":{"self":[{"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/posts\/12652"}],"collection":[{"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/comments?post=12652"}],"version-history":[{"count":11,"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/posts\/12652\/revisions"}],"predecessor-version":[{"id":15995,"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/posts\/12652\/revisions\/15995"}],"wp:attachment":[{"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/media?parent=12652"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/categories?post=12652"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/tags?post=12652"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"Coins](\"http:\/\/www.dfcint.com\/dossier\/wp-content\/uploads\/2015\/01\/Coins-Mario-S.png\")
JAN. 28, 2015 \u2022 For the three month period ending December 31, Nintendo Co. Ltd. posted a net profit of \u00a545.22 billion ($382 million), up from \u00a59.6 billion ($81 million) during the same period last year. By the end of its fiscal year next March, the gamemaker expects to realize \u00a530 billion ($253 million) in net profit for the entire fiscal year. For the nine months ending December 31, net profit was \u00a560 billion ($507 million). But when it comes to operating profit, the annual figure is substantially lower at \u00a520 billion ($169 million). Yet Nintendo’s revenue for the quarter actually decreased to \u00a5271 billion ($2.3 billion), nearly a 10% fall from the holiday quarter in 2013. One reason is that worldwide 3DS units sold fell from 7.7 million during the holiday quarter in 2013 to 5 million in 2014, while Wii U units sold during the period dipped to 1.91 million from 1.95 million. More positively, Nintendo says it has sold more than 5.7 million Amiibo toy figures since last November. Sales of Pok\u00e9mon Omega Ruby\/Pok\u00e9mon Alpha Sapphire on the 3DS were 9.35 million units for the fiscal third quarter. Super Smash Bros. sold 6.2 million units on the 3DS and 3.4 million units on the Wii U. Mario Kart 8 for the Wii U sold 4.8 million units during the holiday period. Overall, profits came in large part thanks to the weaker valuation of the yen, which bolsters the value of North American and European sales.<\/p>\n