Calm Down: Nintendo’s Earnings Report Is Not Doomsday

NintendoOnce Nintendo reduced their sales targets for the coming quarter, and outright stated that WiiU sales “had a negative impact” on their profits, people across the gaming spectrum couldn’t wait to put on their best monk’s robes and predict doom and gloom for not only Nintendo, but the entirety of console based gaming. All of the checkmarks on the typical “Nintendo’s dying” chalkboard were marked. “This proves consoles are dead!”, check. “Mobile is the entirety of the future!”, check. “Nintendo should become a third party publisher!”, check, check, check. The cycle repeats, seemingly every quarter where Satoru Iwata doesn’t jump into Scrooge McDuck’s money bin, while everyone – more specifically, those with a horse in the mobile/tablet vs. console race on the mobile side – predicts Nintendo’s demise, and with it, that of consoles.

Relax, people. Nintendo will be fine, for the same reason I think the PS Vita is screwed: it’s the games, stupid.

Did anyone actually watch Nintendo Direct? Did they see the games that Nintendo’s coming out with? Zelda. Yoshi, by the Kirby’s Epic Yarn people. A Fire Emblem/Shin Megami Tensei crossover. There’s some legitimately good stuff coming down the pike. So what if the WiiU didn’t sell to expectations right after launch? The games are coming out, and that will draw the fans. Yes, even those that have an iPhone.

The main reason people make these predictions is because of financial analysts and their mindsets. In short, if you’re not winning, definitively, you’re losing and should be short-sold. A more mainstream example of this, in the tech sector, is what Apple’s stock is going through. After a record quarter, with $50bn in revenue – yes, billion, with a B – Apple’s stock dropped 10% on their quarterly report, with analysts saying it was a good time to sell because “maybe” the company’s peaked, and “maybe” they’re losing their magic, and “maybe” the company just isn’t the same without Steve Jobs. That logic gets transferred over to when people look at Nintendo. Yes, Nintendo is a beloved company who blew away the previous generation with the Wii, and has a multitude of legendary intellectual property franchises under their wing that have entertained gamers for over thirty years in some cases, but are they doing it on mobile!? Are they in the burgeoning freemium market, which seems to have a profit margin of $Fuck.You (for those who can get listed as a top app)? Are they doing what all the other big names are doing, like Zynga (down over 75% from their IPO) and Rovio (not even public yet, but a perfect example of a “stay away” stock), and almost every other Johnny-come-lately company?

I have learned something in reporting on financial issues in this sector: if Michael Pachter hates it, it’s probably good, and he hates Nintendo. This is the same man who has previously stated, on the record, that he’s not paid by Wedbush to be right.

When it comes to video game consoles, it’s always about the game, and Nintendo’s in the strongest position to leverage console gaming of the big three. In fact, if gaming on a dedicated console is to survive beyond the next console generation, it’s likely going to have to be Nintendo that carries that torch. Microsoft is getting away from the Xbox being a games system, selling it as a multimedia device, something you watch ESPN and Netflix on with games as an aside. Sony no longer has the money to dedicate to taking over a new console generation by brute force like they did in the past. Both of those companies are examining technology that would lock physical copies of games to one system, making lending, renting and reselling of games a non-factor and potentially locking out a lot of their customers in the process. If console gaming is to eventually go the way of the dodo – something I’ve actually predicted – then those two will be the first ones out; Microsoft is already taking steps in that direction with their tablet-like Windows 8 operating system. Nintendo will be the last company left, and they have some *very* powerful cards in their hands.

It’s always about the games, and only the games. Everything else is white noise. Don’t listen to the financial guys who only care about the latest fad. The WiiU will be fine.

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Christopher Bowen

About Christopher Bowen

Christopher Bowen is the Editor in Chief of Gaming Bus. Before opening Gaming Bus in May of 2011, he was the News Editor at Diehard GameFAN, a lead reporter for DailyGamesNews, and a reviewer at Not A True Ending, also contributing to VIMM, SNESZone and Scotsmanality. Outside of the industry, he is a network engineer in Norwalk, CT and a veteran of Operation Iraqi Freedom.