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Nikkei: There Will Be No New Nintendo Hardware This Fiscal Year, Which Ends In March 2023

They certainly care about revenue like every other business out there. I'm not at all trying to say Nintendo isn't one of the largest gaming companies on the planet. They certainly are, but there is always a quest for more. Nintendo isn't just trying to make more profit, they also aim to make more revenue because well it's all part finances. They certainly pay attention to what others do because they certainly seek new ideas on how to raise funds. Charging to play online wasn't exactly their innovation.
While revenue should not be discounted, profit is more important. As a company owner myself, if you told me tomorrow I could triple my revenue but the profit would remain the same I would consider going that way a waste of my company's time and efforts.
 
If Nintendo cared about it that much they'd simply count gross 3rd party digital sales in their IR like Sony does. Of course then their profit margin would be a bit less impressive looking. I think it's pretty obvious which optics they favor.
 
While revenue should not be discounted, profit is more important. As a company owner myself, if you told me tomorrow I could triple my revenue but the profit would remain the same I would consider going that way a waste of my company's time and efforts.
Yes of course but if your profit stayed the same then you weren't able to keep your previous profit margins. This logic is just purely illogical, the whole point of raising revenue is because it also potentially raises profits. Like no, profit is not more important than revenue neither is revenue more important than profit. Think about if I asked you if you would rather make 100K a year vs 1 million a year. Your take home money has the potential to be far more because your salary is far more. Sure you could blow your million on bills if you are a millionaire but commonsense should lead you away from that. If you made 100K then your room for take home should be far less because its less money.
 
Revenue is important, but it’s not the end all be all for Nintendo. They seem to favor profits, and I agree.

Also, looking at the 1st batch of Japanese Splatoon 3 commercials let’s you see the audience they’re advertising to. I only see one kid under 12 in those commercials lol. It’s very important for Nintendo to correctly identify and market to the right audience. What those commercials tell me is Splatoon has a very large portion of the over 12 audience playing.

They’re advertising Splatoon 3 to the Splatoon 2 player base, which seems to be very diverse when it comes to ages. That’s why the whole family market continues to support them.

I remember that 100 best Japanese games of all time list breaking down some of the ages of who plays Splatoon 2 (which was #5 on that list).
 
While revenue should not be discounted, profit is more important. As a company owner myself, if you told me tomorrow I could triple my revenue but the profit would remain the same I would consider going that way a waste of my company's time and efforts.

More cash flow, tho.
More money for R&D.
More money to pay the CEO.
More money and opportunity to get future profits.
Sure your margins is lower, but if anything else is equal and not worse, I do 3x revenue with 1x profits over 1x revenue with 1x profits every time.

But one point stands. It's riskier. So if things don't go well anymore, the first option is a lot harder on the company.
It's quite a theoretical question.
 
More cash flow, tho.
More money for R&D.
More money to pay the CEO.
More money and opportunity to get future profits.
Sure your margins is lower, but if anything else is equal and not worse, I do 3x revenue with 1x profits over 1x revenue with 1x profits every time.

But one point stands. It's riskier. So if things don't go well anymore, the first option is a lot harder on the company.
It's quite a theoretical question.

1) No revenue is not "cash flow". Your liabilities can be sky high, and time sensitive, and as a result you can not have enough cash to cover liabilities at a certain point in time despite big revenues that quater.

This is what we actually call "cash flow". Construction firms can take on huge project with huge revenues, but still go bust due to "cash flow" issue.

2) Revenue itself doesn't correlate necessarily to R&D, the amount of "reinvested profit" does though. The company might dedicate a fixed cost to R&D personnel, but that doesn't mean a company will necessarily shift profits away to feed an R&D department. Most companies make big R&D bets from "reinvested profits" aka not revenue.

3) You do not pay CEO off the revenue, not before deducting you liabilities to external parties. I don't know where this is from.

4) Neither is superior to the other in a real busines operation sense, I don't know where this comes from. Nobody can make a blanket statement like this, about whether it is better or worse without considering what is the business model for the company.

Most investors prefer the company with higher profit margin most of the time, and companies exist to make profits, not revenue.

Even companies that get invested on heavily despite heavily losdes (like Amazon Netflix), investors hang on in the hopes of future monopoly-like profits once they win the E-commerce/Stream wars. The moment they stop growing the pain stats (as seen by Netflix's recent issues).

I am seeing a buncha weird statements in this post about what revenue does. The idea that revenue is super important and what people look at in a company, to the exclusion of other factors, is a weird one, I don't even know where it originated from. Certainly not in serious analyst circles, I do hear it alot on 2ch though.
 
If you have 200% additional revenue that is 100% eaten by COGS you obviously doing something wrong.
That's why I made the premise of everything else the same.
A higher revenue companies in the same field has more money to spend, as you can only spend what you earn.
If you make 100m and have 10m profits, you can spend 80m. If you make 300m and have 10m profits, you can spend 280m.

Anything else would be a huge exception where I don't know any real world example off that exists.
 
If you have 200% additional revenue that is 100% eaten by COGS you obviously doing something wrong.
That's why I made the premise of everything else the same.
A higher revenue companies in the same field has more money to spend, as you can only spend what you earn.
If you make 100m and have 10m profits, you can spend 80m. If you make 300m and have 10m profits, you can spend 280m.

Anything else would be a huge exception where I don't know any real world example off that exists.
But if you have 100m revenue and 10 million profit, this means you already have 90 million in expenses... You don't have suddenly 80 million you can spend on something else, unless you are willing to go into debt based on future profits expectancy or some dubious accounting tricks (which I guess some companies might do)...
 
If you have 200% additional revenue that is 100% eaten by COGS you obviously doing something wrong.
That's why I made the premise of everything else the same.
A higher revenue companies in the same field has more money to spend, as you can only spend what you earn.
If you make 100m and have 10m profits, you can spend 80m. If you make 300m and have 10m profits, you can spend 280m.

Anything else would be a huge exception where I don't know any real world example off that exists.

Once again, this is wrong.

Nothing is "wrong" if you have that type of COGs, it is just the model of your business. It's not optimal to invetsors if you COGS is high, but profit margin is relatively low. In a real sense though, that's how some companies do buisness.

You cannot make this premise because even companies in the same field operate differently. You can easily spend more than you earn, this is basically the operating method of Amazon and Netflix for a long time. Companies can support themselves off loans, or equities as long as these entities(investors) have patience with the business. In fact, Sony ran up higher than Japanese standards debt in launching the PS3, and the debt liabilities didn't really go down until some time into PS4. Meanwhile, Nintendo never ever borrows.

A higher revenue, same profit company doesn't mean it can spend more, it means it NEEDS to SPEND the difference to make that much profit. In other words, you don't "can" spend 280 million, you "have to" spend 280 million" to make 10 million.

If you take it as the exception I get the feeling you don't know what you are really talking about.
 
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If you have 200% additional revenue that is 100% eaten by COGS you obviously doing something wrong.
That's why I made the premise of everything else the same.
A higher revenue companies in the same field has more money to spend, as you can only spend what you earn.
If you make 100m and have 10m profits, you can spend 80m. If you make 300m and have 10m profits, you can spend 280m.

Anything else would be a huge exception where I don't know any real world example off that exists.
high revenue is needed to cover high expense, leaving less room for profit
you haven't "earned" anything yet just from high revenue
low expense doesn't need high revenue to make high profit
revenue scales with company growth but profit doesn't scale in the same way as expense rises much faster than profit as the company expands

a company's goal is ultimately profit so revenue will always be second fiddle to profit
 
high revenue is needed to cover high expense, leaving less room for profit
you haven't "earned" anything yet just from high revenue
low expense doesn't need high revenue to make high profit
revenue scales with company growth but profit doesn't scale in the same way as expense rises much faster than profit as the company expands

a company's goal is ultimately profit so revenue will always be second fiddle to profit
Revenue doesn't play second fiddle to anything. If Nintendo didn't care about revenue then they wouldn't raise their prices nearly every chance they get. High revenue doesn't guarantee high expenses. Companies grow because of the potential, no one grows just to raise their revenue and expenses. They grow because the potential to make more profit is in the revenue growth. Obviously the downside is rising expenses. That's why Nintendo doesn't grow just to grow because they know expenses may get out of hand without the revenue growing with it. If Nintendo could keep their profit margins while growing then they would. Do you really believe Nintendo doesn't want to grow? Ofcourse they do but not at the expense of their profits. Lets say Nintendo makes 9 billion in revenue and 5 billion in profit, that is an incredible profit margin but Nintendo would certainly rather make 18 billion in revenue and 10 billion in profit. That's the same profit margin but 10 billion in profit is certainly better than 5 billion lol. This would be an ideal situation and it is probably very difficult to double your size while retaining your margins but that's why Nintendo takes it slow.
 
Profit doesn't scale linearly with revenue though. People forget but Nintendo's a relatively small company for the returns they bring in. Even just in terms of revenue:

Nintendo: $2.44m per employee
Microsoft: $760k per employee
Sony: $747k per employee

Nintendo's incredibly conservative in approach and growth, this is why they've never been a favorite for investors.
 
The article could be correct and the successor could still come out this year... if it is a cloud-based platform.
This would reconciliate this news with the insistence with which NateDrake repeated that the successor must come between now and H1 2023.

(Of course, it could still be a console and be released next year)
 
The article could be correct and the successor could still come out this year... if it is a cloud-based platform.
This would reconciliate this news with the insistence with which NateDrake repeated that the successor must come between now and H1 2023.

(Of course, it could still be a console and be released next year)
"Cloud-based platform"? Like a streaming stick?

It seems highly unlikely Nintendo ever releases such a piece of hardware.
 
"Cloud-based platform"? Like a streaming stick?

It seems highly unlikely Nintendo ever releases such a piece of hardware.
Not even that. I suggested that the succ would be used in data centres. But a few members on Famiboards quickly objected that Nvidia already has such a solution in their portfolio. There would be no need to develop a new one.
 
Not even that. I suggested that the succ would be used in data centres. But a few members on Famiboards quickly objected that Nvidia already has such a solution in their portfolio. There would be no need to develop a new one.
Beyond that, I don't think Nintendo is interested in cloud gaming whatsoever, outside of allowing some 3rd party games to be playable on their hardware via cloud versions. None of their own 1st party titles are playable via cloud.

And Mario Kart 8D will get DLC until 2024 right?
No, 2023.
 
So Mario kart 8D dlc ends end of 2023, XC3 dlc big part will be roughly summer to winter of 2023, splat3 has updates and a big dlc probably end at end of 2024…. 🤔
Nintendo games getting the minimal support time announced going forward is the standard, Strikers is also getting support at least until late 2022. It has no weight on the possible release of new hardware unless you think Nintendo will not release games that have post-launch support before Drake launches
 
So Mario kart 8D dlc ends end of 2023, XC3 dlc big part will be roughly summer to winter of 2023, splat3 has updates and a big dlc probably end at end of 2024…. 🤔
I still don't see why people think software support has to live and die with the hardware. no other company does that, and Nintendo has yet to show one way or the other so the "it's nintendo" card can't even be used here
 
I still don't see why people think software support has to live and die with the hardware. no other company does that, and Nintendo has yet to show one way or the other so the "it's nintendo" card can't even be used here

It’s actually more with the next game then dlc at least for me. I understand where your getting at especially now with how Sony/XB did with its cross Gen, Nintendo will to and which I agree. But how I look at it at least is like this……

Mario kart 8D dlc intill end of 2023/Splatoon3 intill end of 2024/BotW2 (no dlc) in early 2023/ Pokemon SV dlc in 2023, and no new Gen intill 2026/2027.

NSW2 releases let’s say spring/summer next year…. Which I don’t believe…

*2023/2024 won’t have a new Mario Kart/Pokémon (new Gen)/Splatoon4/Zelda 3D at all intill 2025 (MK10 could be holiday 2024).

*This includes smash bros unless smash is the new MK8D, in which Ultimate Deluxe releases early and adds new modes/characters/etc

*Animal Crossing is also another game that’s not coming out before 2024 imo.

*Nintendo would need its new flagpole franchises, like a 2D and/or 3D Mario and still wait for the others.

Imo I think 2023 could already be stacked, with all the dlc/updates as well as other games exclusive to the NSW such as Fire Emblem (new), MP4, BoTW2, which are already 3 huge games (1 of which is a 20mil+ seller).

Then even 2024 could end with more dlc, another Pokémon game and a few surprises in time for nsw2 to launch holiday 2024/spring 2025 with the new Mario Kart 10 and kick off the new generation with 2024/2025/2026 cross Gen in mind
 
nintendo has been developing for a whole generation now for a single system rather than two, they definitely have tons of games in the backlog for drake if needed

switch games being such great evergreens only helps this backlog grow even more, in regards to new concepts/new franchises we haven't seen much from Nintendo either imo, I believe they are just waiting for the right time, with graphics/power being more diminishing in effect over time, new ideas will go along way to giving the successor a successful launch

in saying all that though, I believe 4k switch concept in itself is a good enough of selling point to continue the switch success, anything more is just gravy
 
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