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zhugeex blog my thoughts on the video game industry home niko blog twitter about me nintendo fy2016 report 20th may, 2017 · zhugeex summary nintendo has released its earnings report for fiscal year 2016. this is the 12-month period ending march 31st 2016. nintendo reported fy2016 revenue of ¥489 billion, down 3% yoy. the decrease was primarily due to the sharp decline in wii u hardware and software unit sales. this decline was large enough to offset the increase seen from nintendo 3ds, the 1 month sales of nintendo switch and the growth of smart device games. nintendo reported an operating profit of ¥29.3 billion, down 10.7% yoy. net profit was ¥102.5 billion, up 521% yoy. the considerable increase in net profit was driven by the ¥64 billion sale of the seattle mariners and an additional ¥20 billion in profit from the pokémon company due to the success of pokémon go. nintendo switch nintendo switch is off to a strong start in 2017. nintendo originally said they would ship 2 million switch’s to retail for the launch period. this number always seemed low to me and it became fairly evident very soon that they had shipped more. nintendo shipped 2.74 million units during the launch period and all retail checks indicate that the device completely sold out across global retailers. nintendo switch continues to see higher demand than supply through april and i expect this to continue through to the end of the year. what’s clear from the outset is that this is not a repeat of the wii u launch. nintendo struggled to sell through its initial launch quarter allocation for wii u and the company was forced to slash production almost immediately. with nintendo switch the console has sold through its launch month allocation and nintendo have had to increase production in order to meet demand. nintendo skewed shipments of nintendo switch hardware and software to satisfy the american market first. nintendo shipped 1.2 million switch’s to america whilst only 600,000 units and 940,000 units were shipped to japan and europe respectively. it’s good to see nintendo prioritising the america market, where they are strongest with home consoles, but they will need to ramp up in other territories quickly to capitalise on upcoming game launches such as mario kart 8 deluxe. software shipments are a similar story. nintendo shipped 2.86 million units of software to america (2.38 games per hardware unit) vs 0.89 million in japan (1.48 games per hardware unit) and 1.71m in europe (1.82 games per hardware unit). the legend of zelda: breath of the wild had 2.76 million packaged shipments + digital sales during the month, 20,000 units higher than the number of nintendo switch hardware units shipped. the legend of zelda is a system seller for nintendo switch right now and with an unheard of 101% attach rate is clearly the reason why everyone has bought the console in its first month. the success of the game is great news for nintendo who have been developing the game since before the wii u came out, but it does show how the console launch line-up failed to attract users outside of the core zelda / nintendo fan base. npd, gfk and famitsu rankings have shown that third party software has struggled on the system with zelda at launch. the nintendo switch shows promise, it’s a powerful device that is priced well and has the advantage of transforming from a home console to portable at any time. to me it seems that switch will convert the loyal nintendo audience first in 2017 before expanding to a wider audience. nintendo is trying to appeal to both the core console gamer on ps4 and casual / semi core gamer on mobile with switch but right now the software and price is not quite right to do that. instead, nintendo is focused on selling in to the wii u, 3ds and lapsed nintendo fan base with its hybrid console this year. nintendo has a strong first party game for nearly every month this year starting with zelda in march, mario kart 8 deluxe in april, arms in june, splatoon 2 in july followed by fire emblem warriors, xenoblade 2 and super mario odyssey in the fall. each of these titles are strong system sellers that appeal to the core nintendo crowd. nintendo has also confirmed that they have other games that will launch this year but have not yet been showcased. the late success of the new nintendo 3ds due to pokemon and the bump wii u received from games like splatoon and mario maker shows that there is still a sizeable core nintendo base out there that is willing to purchase nintendo hardware to play nintendo software, provided the hardware is affordable and not called wii u 2. the appeal of switch as a hybrid allows nintendo to target both the wii u and 3ds install base and convert both with strong nintendo ip that performed well on those systems. this may be enough for nintendo to keep the switch niche and profitable, due to the high attach rate the system will have from the core user base, but it won’t be enough to appeal to the wider console audience on ps4 and the casual audience on mobile to allow company to return to “nintendo like profits”. one big issue that nintendo faces is core third party support on the system. aaa third parties are wary of the audience mismatch on switch and that’s why most of the games announced so far are either handheld or family games that performed well on 3ds/wii u. aaa service games like destiny 2, star wars battlefront ii, call of duty 2017, red dead redemption 2 and ghost recon are nowhere to be found on switch. whilst technical reasons do explain some of it, there is still plenty of reluctance and caution from third party developers when it comes to releasing these titles on switch. there is a reason why ea is only releasing fifa, take two is only releasing nba 2k and ubisoft is only releasing steep. these publishers are using these titles to test the waters and see if the audience mismatch from the wii u and 3ds era is still there on nintendo systems. if these games underperform then aaa publishers will treat the system like the wii u and 3ds. in other words, they’ll only bring over family games that succeeded on the wii u and handheld franchises that succeeded on the 3ds. all the aaa service based games will remain on ps4 and xb1. this could be damaging for the wider adoption of nintendo switch and limit the appeal of the console to the ps4/xb1 audience in year 3 and 4. this brings me on to my next point about the family / casual games segment. sony and microsoft have focused more and more on the core 24-45 year old console gamer this gen with little thought for the casual crowd. this may be because sony and microsoft believe that crowd is long lost to mobile, but i believe that with the right investment and products there could be room for a family/casual audience on switch. nintendo already has a number of titles such as just dance, skylanders and lego on switch. however, these franchises haven’t innovated much since they came out and the audience for them has been shrinking since the wii and ds days. one thing that i was interested in was the monopoly showcase during the nintendo direct. not because i think monopoly is going to do well, but because it took advantage of switch’s usp in a great way. nintendo and third parties need to build more games that act and play differently depending on the set up of switch (tv, portable, table top). there is a lot of untapped potential there imo. it’s an area that aaa publishers can cater to and even indie/mobile developers can take advantage of that usp and the joycons. i believe this is one way that nintendo switch can increase its appeal to the family / casual segment and differentiate itself from mobile gaming. but of course, the big question is whether those currently satisfied with mobile gaming are even willing to part with $$$ for a ‘better’ gaming experience when their mobile gaming experience is ‘good enough’. edit: dragonball xenoverse 2 is an example of one of these games. more like that is what i w

URL analysis for zhugeex.com

https://zhugeex.com/author/zhugeex/
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Whois Information

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Domain Name: ZHUGEEX.COM
Registry Domain ID: 1969829505_DOMAIN_COM-VRSN
Registrar WHOIS Server: whois.godaddy.com
Registrar URL: http://www.godaddy.com
Updated Date: 2016-10-18T16:14:22Z
Creation Date: 2015-10-19T01:31:18Z
Registry Expiry Date: 2019-10-19T01:31:18Z
Registrar: GoDaddy.com, LLC
Registrar IANA ID: 146
Registrar Abuse Contact Email: [email protected]
Registrar Abuse Contact Phone: 480-624-2505
Domain Status: clientDeleteProhibited https://icann.org/epp#clientDeleteProhibited
Domain Status: clientRenewProhibited https://icann.org/epp#clientRenewProhibited
Domain Status: clientTransferProhibited https://icann.org/epp#clientTransferProhibited
Domain Status: clientUpdateProhibited https://icann.org/epp#clientUpdateProhibited
Name Server: NS11.DOMAINCONTROL.COM
Name Server: NS12.DOMAINCONTROL.COM
DNSSEC: unsigned
URL of the ICANN Whois Inaccuracy Complaint Form: https://www.icann.org/wicf/
>>> Last update of whois database: 2018-06-23T08:53:04Z <<<

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  REGISTRAR GoDaddy.com, LLC

SERVERS

  SERVER com.whois-servers.net

  ARGS domain =zhugeex.com

  PORT 43

  TYPE domain

DOMAIN

  NAME zhugeex.com

  CHANGED 2016-10-18

  CREATED 2015-10-19

STATUS
clientDeleteProhibited https://icann.org/epp#clientDeleteProhibited
clientRenewProhibited https://icann.org/epp#clientRenewProhibited
clientTransferProhibited https://icann.org/epp#clientTransferProhibited
clientUpdateProhibited https://icann.org/epp#clientUpdateProhibited

NSERVER

  NS11.DOMAINCONTROL.COM 216.69.185.6

  NS12.DOMAINCONTROL.COM 173.201.73.6

  REGISTERED yes

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