In the past week Nintendo revealed its Q3 financial results, which brought a dip in profit and some slightly concerning sales figures. Overall, however, investors seemed to keep the faith while Nintendo President Tatsumi Kimishima kept most cards closely to his chest in the accompanying President's Briefing.
The official English translations from the investor Q & A are now available, and they're short on concrete information but full of interesting comments and pointers from Kimishima-san.
One investor question, inevitably, raised the matter of 'Nintendo-Like' profits, requesting an example of a key driver that'll see handsome reported returns come the start of April 2017; Kimishima-san focused on the two most obvious upcoming profit drivers.
The previous and current fiscal years have been a period of preparation to launch a number of new endeavors, such as NX development, development for smart devices and business using our character IP, in addition to driving our Wii U and Nintendo 3DS businesses. At the same time, it has been our priority to take a close look at areas of our existing business where the revenue and expenses had become unbalanced, and to make sure that we corrected this balance. As I have said before, we will be launching many of our new business activities as we move from this fiscal year into the next.
When you start any new business, it is important to make the public aware of what you will be doing. In the next fiscal year, we will have to make preparations and investments to achieve these goals, and that comes with certain costs.
The question was to pick one area with which we will be able to achieve Nintendo-like profits, but I would like to suggest two areas. One area is our NX business, and another is our business for smart devices. I believe that keeping these two endeavors on track will be key to achieving Nintendo-like profits. I don't have any further details to share about the next fiscal year at this time, but we will explain about our plan and when we will aim to achieve Nintendo-like profits at a future date.
That serves as a reminder that NX is expected before the end of March 2017, with a popular consensus online - at present - being that the hardware will arrive in some form in time for the Holiday season this year. Highlighting it as key to profits for the next financial year helps to reinforce that impression.
It's also worth noting that it was emphasized that the QoL (Quality of Life) sleep sensor is currently off the agenda for a commercial release, but the area is still in Nintendo's plans.
I would also like to touch on the QOL (Quality of Life) program today. We do not feel that we are currently at a stage where we can commercialize a product that deals with sleep and fatigue, so we are not planning to launch any products in this area in the fiscal year ending in March 2016. However, we do believe there is potential in the QOL sector, so we will continue to consider further development in this area.
It's little surprise that NX and multiple mobile releases - including Pokémon Go, presumably, are high on Nintendo's agenda. Here's hoping they deliver success for the company.
Thank god that Nintendo still is developing QOL. I could use something like that. I barely get any good sleep.
Did you guys change the standard font? I like the font used in the quotes, but is that Arial or Times New Roman in the rest, looks really blocky? Very readable, but ugly.
OK, I'm trying really hard to massage his words to mean NX releases in their April 2016-March 2017 financial year, but it's a stretch for me.
I read it as their next financial year is going to take to a loss due to development and marketing:
"In the next fiscal year, we will have to make preparations and investments to achieve these goals, and that comes with certain costs."
then perhaps the next year - April 2017-March 2018 - will see the return to Nintendo like profits?
"I believe that keeping these two endeavors on track will be key to achieving Nintendo-like profits. I don't have any further details to share about the next fiscal year at this time,"
He sounds like he's saying they have to take a loss for next year - - this April thru next March - so that in the future w/ NX they'll be able to return to profits.
Now I'm not trying to fit his words into my world view, I think NX is due end of 2016, but the way he speaks about costs but doesn't really want to get nailed down on the timeline for a return to profits - AS HE DOESN'T ANSWER THE QUESTION ABOUT WHEN IT WILL HAPPEN -
"but we will explain about our plan and when we will aim to achieve Nintendo-like profits at a future date."
Now this 1 sentence does allude to things happening in 2016 -
"we will be launching many of our new business activities as we move from this fiscal year into the next."
but that could simply mean mobile and licensing IP, "business activities" not an NX launch. He never even mentions NX launch, he says "NX development".
I still believe NX needs to come out this holiday, and probably will, but all of his hollow corporate speak doesn't shed any more light on the matter. Lots of anecdotal evidence, but I don't see where he says "NX is launching in the upcoming year".
I'm not quite sure if Quality of Life -products will help Nintendo achieve "Nintendo-like" profits or not.
Surely there is some interest in all of these modern health devices etc., but Nintendo is known for games and consoles. If Nintendo were to release a Quality of Life -product, would people expect it to be a device meant to actually increase quality of life, or would people just think of it as a toy?
I will honestly be surprised if the NX launches this year, given that we know nothing about it. We all know the 3DS isn't selling as well as it was a while back, and the Wii U isn't the blockbuster Nintendo hoped it would be, but I still find it hard to believe it will launch this year: it just feels a bit rushed, as the Wii U isn't even 4 yet. Nintendo really are being secretive about this, I just hope we get some information soon!
@Yorumi "I'd still think that points to a 2016 release"
I agree it could be viewed that way, but I also think it could be viewed other ways, but the subtitle reads like he was says something concrete about a release this fiscal year, and I don't think anything in there is concrete, it's all if's and maybe's.
"Another reminder that NX is due before March 2017"
The subtitle is stated matter of fact, but Kimishima's comments are speculative as far as the timing of the NX launch. We know it's out there, and we know it's coming, but I don't see a guaranteed launch before March 2017. Something will happen this year for sure, mobile and theme parks and My Nintendo, but I can't nail down an NX launch date from what he said.
@Yorumi Seems like for every person on here who says NX in 2016 there is still a person who says NX in 2017, and I don't see anything in there to convince those people it's launching this year.
OK, it's not 1-1, maybe 75% in 2016, 25% in 2017. But of those 25%, we'll have to see if what he said here changes any of their minds to 2016 as the subtitles implies. How's that?
Do gamers even want Nintendo to make non gaming products?
It's not a guarantee. It might sounds like he's implying an NX release this fiscal year, but that's mostly because he was answering a question about expecting big profits by April '17. Nothing that Kimishima says himself really states anything about the NX's expected release other than that they will be spending resources this coming fiscal year toward it's development.
Are we not just stating the obvious, regarding profit....
"NX business, and another is business for smart devices". Something we have no knowledge of and Amiibo's which we know all about.
I guess Nintendo is relying totally on the NX and we will all have our fingers crossed.
......and I guess they want a Candy Crush success with one of their games.
@rjejr In Accounting, R&D costs usually don't hit until the related item is put into use or the product is released. They would be capitalized before that. Therefore, interpreting the "costs" and "return to profits" statements like you did, I would expect that means they plan to launch the NX in FY 17 (4/1/16 - 3/31/17).
That said, I am thinking in terms of U.S. GAAP (Generally Accepted Accounting Principals). I am not overly familiar with IFRS (International Financial Reporting Standards) and I have no idea what is common in Japan. But since the operating losses were first in FY 2012 and 2013 (4/1/11 - 3/31/14), the years the 3DS and Wii U were released, I would think that it works the same.
I really don't get the feeling it's confirmed NX is launching before March 2017. Actually, what gives that impression?
From my understanding, I see Kimishima's comments to mean they're launching several new businesses in the next fiscal year, but to launch successfully, [a lot of] time has to be spent raising public awareness and pushing these new businesses out there.
That reads to me as if they're launching the promotion and awareness around NX from April 2016 for a later release, later on into 2017. I don't think revealing in June at E3 and launching in Holiday 2016 is exactly enough to build awareness... but I'm not in charge, here. That'd just my opinion!
I think also, people forget, that even though the Wii U and 3DS aren't returning 'Nintendo-like' profits, they're still making money, and they'll likely continue that with the release of titles this year. Plus, we don't really know anything else about what they have in Dev. for both beyond what they've announced...
I personally can't see new hardware/platform released this year, but it's pure speculation from everyone!
The NX doesn't sound like a console. Sounds like an addition to their current lineup. If Nintendo has a bunch of games lined up for Wii U and 3DS then they have been great at keeping it secret.
My money's still on a 2017 release with awareness built up in the next fiscal year... But hey what do I know
@rjejr Yeah, this is clear as mud.
It could certainly be read in a couple of ways. It's good that he thinks NX is going to be one of two keys to big profits for the company. And even if it's not direct evidence, it means he doesn't see Wii U or 3DS suddenly surging. If that's the case, as I've suggested before, how long can any fan expect Nintendo to chug along with underperforming hardware? End of 2016 I can see, especially with vocalized interest in avoiding the drought that the Wii had. End of 2017? You better show us something major for both platforms if we are going to care that long.
@aaronmclaren Both PS4 and Xbox One were announced and released in the same year. True, they were announced in Feb/March respectively and released in Nov, but the full reveal with games and stuff was not until E3, so I think it is feasible.
Also, I still think its possible Nintendo might reveal it before E3 in a Nintendo Direct, if its a 2016 launch. The 3DSXL and the New 3DS were both revealed in Nintendo Directs. The 2DS was revealed in a press release. I know people expect a live event for the reveal, and it's true that none of my examples were new console reveals, but NDs were not as relevant before 3DS and Wii U either.
@aaronmclaren you have to understand that for investors, the profits made by nintendo doesnt amount to much because its so little. The minuscule amount of the profit prevents nintendo from declaring the distrubution of dividends. In otherwords, unless Nintendo increase their profits they may as well sell their shares since at the moment they are not reaping any benefits from the little nintendo profits.
I know I'm setting myself up to get hammered for this, but what if the NX is a third pillar? What if the NX is a set top box that has a handheld element that uses the same principles as mobile technology?
The technology already exists that could keep costs down. The ability to move from handheld to console would exist. The integrated account would make sense in this format.
As far as power, they have the patent that was circulating where a console would get a boost from other consoles on the network.
Amazon and Apple already feels this sector is worth looking into.
I bet NX will launch this year with. Zelda and Mario! Boom!!!! 2 heavy hits KO the haters.
Macronix CEO already confirmed NX for 2016. He would know... his company is helping make it...
"The NX doesn't sound like a console". Uuumm... OK.
Those dev kits being sent to third party developers must be imaginery.
They started a good buzz on the NX throughout the internet and some of the gaming magazines, but hopefully, when it's close to launch, they start to advertise by commercials and more...this will definitely help them to make a great selling console. Releasing it in October/November would be a good move for them too...with the PS4 and XONE being a little older and almost everyone owning at least one of them, this means that Nintendo could dominate the holiday season...especially if it's both a handheld and console. I'm actually excited for it, and I can't wait for E3 to see what the console will be all about!!!
@Yorumi Yes, very true.
My feeling is that the NX is going to be a hybrid device...a tablet similar to what the wii u has, but one that can stand alone...games can be uploaded into it and played on the tablet. That same game tablet can also serve as a controller for the larger NX console. This seems like a logical evolution from the Wii U. Perhaps the tablet would even offer a split screen and be compatible with the DS and 3DS systems with the main console offering Wii U backward compatibility.
@aaronsullivan "clear as mud"
I still think end of 2016 as well, I just didn't read him say that.
If Nitneod is having problems making Wii U CPU's 3 years after it released though, who knows how long until they can actually get the NX made and shipped out the door?
@Yorumi "something like it could be delayed"
Well that goes for anything Ntinedo does - Zelda U, SF Zero, Miitomo, Club Nintendo. When does Ninedo get something out on time? Even though I still think late 2016, a part of me thinks "no". PS4 launched in Feb in Japan. Original 3DS launched in the spring. NX doesn't have to release in late 2016, but it should. 3DS and Wii U are both running out of hardware steam and game steam, can't wait until 2017.
I think a stock shortage makes a lot of sense for the Wii U. I don't think Nintendo expected the decent uptick in Japan Wii U sales and let's face Nintendo has been trying to clear unsold hardware since the disappointing launch. They'd rather be on top of it, but I wonder if this means that Nintendo just got down to its last Wii U consoles from the original contracts and we are seeing a readjustment snag as they start a new run/contract.
Churning out big numbers of hardware in a short period of time is a whole different deal.
This is severe speculation though. I feel like it shouldn't be too hard to find out who's been manufacturing Wii U consoles and for how long.
The important question is if they'll be able to stock enough refreshed Red Wii U consoles to sit beside NX when it launches to make things confusing.
@aaronsullivan Wii U Mini - Gamepad sold separately. I think it will still have Netflix though.
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