NBrid

Today word came of the unthinkable: Nintendo will post a net lost for the first half of this fiscal year. Is this the begining of the end? Not if other recent big Nintendo events continue.

For the 6 months leading up to September 2003, Nintendo will face a 3 billon yen net lose (about 23 million USD). This is the first time Nintendo has ever been in the red since going public in 1962. In May, Nintendo had estimated a net profit of about 15 billion yen, which was yet another decline in projected profits. So this had to be seen coming. Some of the blame has been placed on a weak dollar to yen exchange, but much also has to be placed on weak GameCube sales.

This news is quite big. Yes, I know Xbox has yet to make a profit for Microsoft, but it's a different situation. Has Microsoft themselves lost? No. And more importantly, MS never really intended for Xbox to make them a profit. They planned on Xbox setting up Xbox 2 to make a profit for Microsoft.

So many Nintendo fans had always argued, "Well, Nintendo is still profitable so they must be doing something right." They ignored the downward trend that Nintendo seemed to be headed in the future and only looked at current or even past history. Things have changed, but for the longest time, Nintendo didn't. However recently, a number of surprising changes had been coming out of Nintendo. With news of this lose, it all makes sense.

The biggest recent event was dropping the price of GameCube down to $99 (from $159). This did what games like Mario Sunshine, Metroid Prime, Zelda Wind Waker, Soul Calibur 2, F-Zero, ect. all couldn't do: in quadruppled sales in only the first week of the price change. In August and September, the GC sold about 15,000 units total in the US. In the first week of the change, Nintendo claims 61,000 units were sold. It is a known fact that early this year Nintendo stopped production of the GC because they had too many in stockpile. If this continues, it won't be long before production resumes.

Another event was the announcement of Nintendo's iQue Player. Don't get too excited. It's just a "new" system for China. Usually all of the big game manufacturers stay out of China due to rampant piracy, but Nintendo sees a chance of making a profit. It's only really an old N64 (even just older N64 games like Mario 64), and because of this even if piracy continues, it really is just a chance to bring in extra revenue for Nintendo. People will "download" games in specific stores onto cards that are designed to work only in their personal console. Does this effect us gamers? No. But it could help Nintendo whether this storm in the eyes of their investors of being in the red.

Another recent change has been Nintendo's aggressive ad campaign. We first started to see it with all the Soul Calibur 2 TV ads showcasing Link in the GC version. Then came F-Zero ads, and we're sure to see numerous Rogue Leader and Mario Kart ads (Nintendo's other big games for this year). But the big campaign is it's "Who are you?" ads. In these they 'paste' well-known Nintendo franchise characters (Mario) onto other famous people and scenes. All I can say is, it's about time! Where Sony and Microsoft bombaraded people with ads, Nintendo only showed a few (and many weren't very good, remember that aweful Sunshine ad?). And it hurt GC sales.

So while many might tout the first ever loses by Nintendo as the begining of the end, it could really be the begining of a whole new Nintendo. Almost since GC launced I have been a critic of the system and Nintendo's handeling of the system. Like already noted, people shrugged it off because Nintendo was still profitable, blind to the fact Nintendo could not keep it up. But this lose seems to have awaken Nintendo. They new it was coming, and already have in place a number of changes, including the price cut. Hopefully more are on the way. If so, the future for Nintendo now seems brighter to me then it did just 6 months ago.