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The Trouble with Nintendo. A TL;DR topic.

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True of course but the 3ds will put them in profit from here on in even with wii u doing as bad as it is now. They are hardly in the Sony situation would be the point, nintendo HQ doesnt need to be sold to balance the books and hide a billion loss for another year ;)

They actually lost money operationally the last 3 months, despite the 3DS success, as the Wii U is still a loss leader device, that loss could have been bigger if they had sold more hardware than they did. They posted a bottom line profit due to favourable currency primarily. Sony games also posted a loss over the last 3 months due to PS4 R&D costs exceeding profits from everything else, Sony have actually finally stemmed the bleeding from the core electronics division, as pretty much all the other parts of the conglomerate were profitable (well I suppose the film/TV division had a major flop disguised by offloading some of the family silver, but entertainment has always been a bit choppy).

Iwata promises the shareholders a certain level of profitability in the near future, that hinges on their own very high margin software selling like hotcakes and fixing the hardware profitability problems of the Wii U. A significant chunk of Nintendo's share value is essentially the value of their cash pile, investors must be expecting it to come good, considering the current P/E ratio implying quite brisk growth expected in their profitability being factored in.

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A significant chunk of Nintendo's share value is essentially the value of their cash pile, investors must be expecting it to come good, considering the current P/E ratio implying quite brisk growth expected in their profitability being factored in.

Or maybe investors are expecting Nintendo to use some of that cash to buy back shares (like Apple have effectively had to do with some of their cash pile?)

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Mind you if China does stop its ban on video consoles I suspect the 3DS might sell 'a few' :)

It will certainly sell "a few", but no idea how many that will be or whether it'll lead to long-term profits for Nintendo.

If the 3DS does succeed in China, expect to see an R4 card equivalent in no time; piracy is still a huge issue there.

Gaming in China is dominated by smart devices and online browser-based and MMO titles. The reason for this is similar to the above - those sorts of games are often freemium and their sever-side model makes them less vulnerable to piracy than other types of gaming.

Nintendo's approach of asking for a comparatively big investment up-front might not work, irrespective of how good their games/hardware are.

The other thing to bear in mind is that even if consoles are permitted in China, the country still has severe laws guiding game content. For example, games with military themes might not be granted release unless they star the PLA, and they always win. Games with rebellious or anti-establishment themes may be prevented release too.

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If the 3DS does succeed in China, expect to see an R4 card equivalent in no time; piracy is still a huge issue there.

Why? If an R4-like card is going to be released then it's going to be released, regardless of whether the 3DS is successful in China or not.

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Are there many military themed games on the 3DS?

Ghost Recon Shadow Wars. And, uh, gee, uuuhm...

I was giving a single example, but as you seem to want specifics, here are the exact rules.

Video games considered for Chinese release cannot contain examples of any of the following behaviours:

Violating basic principles of the Constitution

Threatening national unity, sovereignty and territorial integrity

Divulging state secrets

Threatening state security

Damaging the nation's glory

Disturbing social order

Infringing on others' legitimate rights

These, however, are more complex than those headings might suggest. For example, I once read a document explaining about how Animal Crossing could not be released in China, because the player (a human) owing money to Tom Nook (an animal) could be classified as "disturbing the social order".

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Ah, cheers for that. I wasn't being picky, I just have no idea about this. That's crazy about Animal Crossing.

I should say that the document I read (which was online, but I can't seem to find now) wasn't an official Nintendo thing, it was just written by someone who had went through the finer details of China's media rules for video games. If I recall correctly, it was because the "disturbing order" thing had a subsection about "representing a situation in which humans are subservient to animals" being seen as unacceptable.

Also, many games feature militaries, even if not real-world ones. For example, part of the story of Solatorobo on DS involves a clash between a loose affiliation of city-states and a mighty empire called the Kurvaz, who wear soldier uniforms, who act in a unified manner, who believe in unity and uniformity... And they're the villains! This is the point - it's difficult to see what games would get refused, it isn't always obvious.

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Why? If an R4-like card is going to be released then it's going to be released, regardless of whether the 3DS is successful in China or not.

I assume it's about the market - if a large number of people are suddenly more interested in piracy, and the market grows, then you're more likely to see one. Maybe the effort/reward just isn't there yet but with China it could be.

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I assume it's about the market - if a large number of people are suddenly more interested in piracy, and the market grows, then you're more likely to see one. Maybe the effort/reward just isn't there yet but with China it could be.

Not just that. Nintendo has a strong presence in the US/Europe/Japan to act swiftly and legally challenge any early indications of such devices. Doing such things in China is much more complicated, I think - certainly companies in other industries, such as film, have had little success enforcing copyright law there.

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The Chinese games market is getting near being worth about as much as the Japanese games market now, difference being that, much like the South Koreans, the Chinese have gotten used to a much different type of gaming than that which took hold in the developed Western economies, so even if the Chinese government finally lifts the ban on consoles, I wouldn't necessarily expect it to do much for the console makers immediately, consoles can be bought in China currently, just not offically.

Or maybe investors are expecting Nintendo to use some of that cash to buy back shares (like Apple have effectively had to do with some of their cash pile?)



If you strip out the cash pile and Nintendo manage to deliver their profit forecast (~$550 Million bottom line profits this year from $1 Billion of operating profits), the P/E ratio isn't actually that unreasonable, but most people consider Nintendo's forecasts for this year as being a mite optimistic, but traders/investors can get ahead of reality on occasion, as the share price history of Nintendo over the last decade and Apple demonstrates. Of course, if people are confident that Nintendo will deliver, might be worth a punt.

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the Chinese have gotten used to a much different type of gaming than that which took hold in the developed Western economies

Consider that many Chinese online games are pay-to-win - and are successful despite that being made very obvious to the player. You'll start to get an appreciation for how different the market is, when you remember that such things practically immediately kill Western online games.

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I was more thinking that getting a significant chunk of Chinese/Korean gamers to buy expensive dedicated games consoles and then buying expensive games for such machines when they've been brought up on PAYG gaming Cafés and PAYG online games might not be that easy. There is certainly plenty of potential money to be made in South Korea and China, but the local players are hardly going to roll over and let the console players take any of their customers, and some of those companies are fecking huge now, big enough to start throwing money around buying up Western devs like Epic.

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I was more thinking that getting a significant chunk of Chinese/Korean gamers to buy expensive dedicated games consoles and then buying expensive games for such machines when they've been brought up on PAYG gaming Cafés and PAYG online games might not be that easy. There is certainly plenty of potential money to be made in South Korea and China, but the local players are hardly going to roll over and let the console players take any of their customers, and some of those companies are fecking huge now, big enough to start throwing money around buying up Western devs like Epic.

I wasn't disagreeing with you :) Just trying to further your point - gaming over there is fundamentally different to other territories. Being able to sell in China is the first step, certainly not the last.

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A price drop looks unlikely then...

Iwata: Wii U's price isn't the problem

While the Wii U hasn't sold particularly well, with Nintendo moving just 160,000 units across three months in Q1 2013, Nintendo President Satoru Iwata is holding strong that the system's price isn't the problem - the price discrepancy between the two Wii U models is. "If the price is actually an issue [with Wii U], then there is some contradiction between the current sales balance between the Basic and Premium versions of the Wii U," Iwata told CVG.

"The basic version should have sold a lot, but the fact of the matter is that people are buying more of the premium version. So the issue is not there," he said.

Iwata cited the disparity in sales between the Deluxe and Basic Wii U models in January when noting that the system was selling "steadily," and stated plans in June to regain the system's momentum through the end of the year before establishing "successful third-party Wii U software titles."

Iwata has been there before, after all; He took a 50 percent pay cut in July 2011 due to poor 3DS sales around the time the system's price dropped, later selling the 3DS XL at a profit.

Of course, whatever version of the Wii U you choose to pick up, there's still the matter of what the heck you're going to play on it. "I understand that the real issue is the lack of software, and the only solution is to provide the mass-market with a number of quality software titles," said Iwata. Great idea!

Surely the Basic is selling worse because 8GB seems totally worthless?

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It's got nothing to do with the storage. The PS3 and 360 had the same problems with their cheaper SKUs. The type of person who buys a console near launch is going to want the best model. When the price comes down it'll make more sense as the 360 showed.

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I thought about going premium. But even a 32GB will inevitably need an external Hard Drive so might as well spend the difference on one. Plus I like the white one! If the Basic was actually priced at £150 they'd sell. Asda sold out pretty quickly at that price.

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Iwata.

It doesn't mean that they're going to merge both console lines together. They basically want to be in a position where they can easily move code and assets between the two. I think that having a single OS was specifically mentioned at the time.

It'll be amusing to see the reactions when the next Nintendo home console has an ARM CPU instead of a x86 one.

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Iwata.

It doesn't mean that they're going to merge both console lines together. They basically want to be in a position where they can easily move code and assets between the two. I think that having a single OS was specifically mentioned at the time.

It'll be amusing to see the reactions when the next Nintendo home console has an ARM CPU instead of a x86 one.

They'll probably continue using PowerPC chips with a custom design. Expresso is a custom PowerPC design (an altered wii CPU with much higher clock and running as a 3 core, one is primary and the others secondary as far as memory is concerned).

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