Worrying About Nintendo Pulling Out Of The Console-Manufacturing Business? Get Your Priorities Straight.

So, as we know, quite a number of those involved on the gaming scene, as well as every Tom, Dick and Harriet is discussing the welfare possibilities of the big three with their current state and standing in the industry – especially that of Nintendo. Their E3 2012 showcase categorically wasn’t looking to be too spectacular, and many a-doubt is still circulating their latest revelations regarding the Wii U – or rather, lack of such, thereof. We still haven’t gotten quite an amount of information regarding the Wii U, most specifically an official launch date, an officially-confirmed retail price, and most importantly, officially released tech specs for the console. This particular revelation is proving to be a very important factor to consider when it comes to the acceptance of the console as a solid competitor in the next-gen phase among the masses – will the console prove powerful enough to sturdily detach itself from what the current-gen PS3 and Xbox 360 already offer in terms of power? Well, that’s a discussion for another day when we finally have the facts from Nintendo themselves to scuffle over. I think the main disquiet over everybody’s heads to cause all this is, with how appealing a console the Wii U is looking to be for one of its kind, why are they keeping us in the dark about so many vital facts? With all this quietness over at the big N’s headquarters, people are automatically jumping to the worst possible explanation: the tech specs just have to be too disappointing to in comparison. Why else would Nintendo be hiding them after all this raucous debating swirling through the media, especially after we even had a rumour-worthy leak of them? Well, personally, I feel it is considerably naïve to be jumping to these conclusions, but then again, with how the Wii fared against its two major competitors in the power sector, we do need to make way for the worst – even if the console did see major success, regardless.

So in a nutshell, all this, combined with a disappointingly unimpressive presentation which undermined the Wii U’s potential at E3 2012, and a look at the additionally plummeting Wii sales, and slightly bleak-looking events on the 3DS’ part, people have come to yet another overall conclusion: the Wii U is destined to cut itself short of its predicted success. And when that happens, what is the most likely outcome, in people’s minds? Nintendo unfortunately encounters a massive loss of funds to the point of an abysmal financial crisis, and with no other departments to keep the company’s head above water, ends up having to rely on the success of its IPs – thus pulling out of the console manufacturing business, and becoming a software-only company; a dreaded third-party developer. But, on the contrary, this doesn’t seem to be something that’s going to be happening so fast and inexplicably, based on a lot of logical statements. In fact, it’s something that we probably won’t see for quite near half a century, and that in itself is the worst possible outcome. Don’t believe me? Let’s take a look at something, then.

According to reports dating back from February/March 2012 on various sites, including GamesRadar and GoNintendo, the big N has got tons upon tons upon tons of moolah to annually take incredibly forceful blows to the financial sectors of the company, and yet still keep going until 2052. Bloody hell. To boot, here’s an additional quote from a feature in a UK issue of Nintendo Gamer magazine:

“Buried in reams of financial data is the revelation that Nintendo have 812.8 billion Yen (£6.7/$10.5 billion) in the bank – enough for it to take a 20 billion Yen loss (£163/$257 million) every year until 2052. Then there’s almost 469 billion Yen (£3.8/$6.0 billion) held in premises, equipment and investments. When that runs out – we’re in the year 2075 by this point – they’ve got some of the most valuable intellectual property in gaming to sell off before the company goes out of business.”

Money, money, money.

I don’t have any comment – I think this says all that needs to be said.

So, I think that’s that on Nintendo’s part financially – even if the Wii U doesn’t measure up to its predicted success, which is pretty unlikely to be honest, it’s only one slight fall-back – emphasis on slight. It seems the company won’t even flinch a millimetre before they’reset  on their merry way to their next big project. Oh, happy days for Iwata and his throne of gold. But let’s leave Nintendo’s part swimmingly.  I think, if there’s any company we should be considerably concerned about its falling out of business, it’s another one of the big three – Sony. Now, of course I know Sony is considerably a much bigger company than Nintendo is – Nintendo focuses solely on games, games consoles and peripherals, while Sony is basically a big name in almost every corner of the electronics market – that means Sony has many more departments to lean on in times of financial crisis – but this also means they have bigger and more intimidating liabilities. But before we go on to debate what the most likely causes of these ill-fated fiscal happenings are, and if this monetary crisis really does pose a threat to Sony’s gaming division – don your oxygen tanks, as we’re looking deeper into these reports.

The internet saw a barrage of financial reports concerning the welfare of Sony’s overall money-making back in June this year – and it was not looking good in the least. Obtained via IGN, the mere fact (only one of many, if I may add) that at this year’s E3 just gone by, Sony announced its stock had fallen down to below ¥1,000 ($12.79), the lowest it has ever been since 1984, shows that the company’s ship is in significantly mortal peril at sea.  Though luckily, we saw a report from Reuters following up on this statement, stating that though the stocks did indeed fall beyond the ¥1,000 threshold, it did ease up just bang on the mark at 1.3% more before trading ended. Still, it still isn’t over for Sony – in fact, it seems to be far from it.

On other news regarding the thick mud Sony seems to be swimming through right now, you may or may not have heard of the massive sacking that was being planned to occur reported back in April 2012, originally via The Japan Times Online. A whopping 10,000 workers (roughly amounting to 6% of Sony’s huge workforce) were being planned to get the sack from the company, “in a bid to regain global competitiveness”, as it was declared. But positively enough, an article from Nikkei stated that half of the lay-offs, 5,000 total, were to emanate from “a reorganization of its businesses for small and medium-size display panels and noncore chemicals,”, which was earlier specified not to have any effect on Sony’s gaming sector whatsoever – hooray. But unfortunately, we still have the other 5,000 employees to be laid off… what does that amount to for the company? Well, nobody was quite sure whether that was certain to come from Sony’s gaming division or not, or whether it was part of the numbers taken into account concerning the closing-downs of two of Sony’s first-party developer divisions – those were BigBig Studio, the developers who created Pursuit Force and Little Deviants, which got shot down at the very start of this year, and the second being Zipper Interactive, the sole developers behind SOCOM, MAG and Unit 13, which was also unfortunately closed in April. Whether these lay-offs did account for the number of job-losses inclusive with the shutting-downs of these studios or not, we’re unsure of – but either way, it still wasn’t good news.

Moving swiftly on, let’s take a look at this report we got a look at back in February. Apparently, Sony had  reported a staggering net loss of $2.03 billion (£1.28 billion) during its third financial quarter, which was during October through to December in 2011 – it was also reported that a lot of this significant decrease in revenue was due to the results of PS3 hardware sales, and the related price cut on the consoles, despite the 13% increase in console sales for that department. Sony’s Consumer Products and Services division, which is the cover for all things under the PlayStation brand, account for a loss of $1.09 billion (£688 million) for that same quarter as well. Dun… dun… dun… Now, before you possibly go on to say anything, yes, I am aware that Nintendo also had their share of losses too – but that was only $837 million over the period of a full year, not just a quarter. A massive difference in figures right there. The economy does come in to major play with both companies, but we can see Sony is taking the more massive blow to the jaw,  what with the trouble in the Japanese economy and recession especially for them – hopefully, things will pull through for them though. As much of a core Nintendo fan as I may be, I definitely don’t want to see Sony go all the way below the water; I think the constant banter in the industry with Nintendo and Sony’s presences makes it a whole lot more worthwhile. These are unfortunate times indeed.

To round all this up, I’m going to end this by recollecting an article published by Hiroko Tabuchi in The New York Times shedding a fluorescent light on Sony’s monetary floundering. We saw the esteemed writer fairly contextualise Sony’s overall problems as a more prevalent issue to the Japanese industry wholly (which I also noted seemed to be a big factor to the case in my last paragraph) – though she did also go on to say the very core problem at the root of the company was their, in her words, “astonishing lack of ideas”. If one were to dig through this statement, I actually do believe we could evidently agree with her in this front as well – Sony hasn’t come up with anything wowing or considerably intriguing in the last year to push them a little further into the light, a fact that may conclude that the time to unveil the next-gen “PS4” is ripe. But if Sony still refuses to give us an official announcement by next year’s E3, if not revelation, regarding a competing entry into the eighth-gen set of consoles which is, as of now, solely led by the Wii U, I can only predict slow movements for them – but then again, the PS3 Slim just might be looking to save the day for now.

As a concluding result, Tabuchi stated:

“Sony’s market value is now one-ninth that of Samsung Electronics, and just one-thirtieth of Apple’s,” companies that stole Sony’s thunder in the television and music industries, respectively. “One by one, every sphere where the company competed — from hardware to software to communications to content — was turned topsy-turvy by disruptive new technology and unforeseen rivals. And these changes only highlighted the conflicts and divisions within Sony,”

There’s no quarrel here – the woman is evidently skilfully stating the facts. There is not much more to quote here that won’t echo more the roots of the problems Sony is primarily facing in its financial struggles, but if you do want to read more into Tabuchi’s article, I suggest you do so over here – it’s a clear outline of the overall issues, and an immersing read for anybody interested.

Now, to end this rather lengthy roller-coaster trip down the recent struggles on Sony’s part, and Nintendo’s unlikeliness to drop out themselves, I shall give my final conclusions on this article. Following the figures we saw in the company’s bank account, Nintendo doesn’t look likely to drop out as console manufacturers any time soon, inclusive of possibilities of losses – we all need to slow down regarding all these allegations with the Wii U, especially seeing as we haven’t tapped into half the overall information regarding the console. It’s nothing new when I state that Nintendo has always had tons of brilliant games exclusive to their side – and what have we also seen? Their hardware is always made in a way that greatly benefits their first-party games. Always. That in its self has always been a major selling point, and always will continue to be in the future, as I see it. Even if the Wii U doesn’t meet its targeted sales figures, as unlikely a possibility as this may seem, Nintendo are positively ready to dust off their coats and pick themselves up right off their feet. There is absolutely nothing that gives us even the slightest foreboding hint that they aren’t ready to bounce back from anything – they have miles laid out ahead of them to go on.

Now, on Sony’s front, it is undeniable that they are facing huge financial trouble – bigger than anyone could’ve expected, really. I feel that quite a bit of this can be attributed to the figures brought in by the PS Vita, most notably – I, personally, believe this is an amazing piece of handheld tech, but is also due for even just a slight price cut. When Nintendo went this destined route with the 3DS only months after it came out, it benefited them and the consumers a great deal, even with the loss they encountered from it. Of course, the Vita didn’t need to do that so early – as expensive as it did seem and as much complaint as there was back then, it did have quite enough bang for its buck, and a pretty much flawless launch line-up. But now, five months in, these complaints are much more significant than they were now, especially considering the side of the Japanese economical state – a price drop for the PS Vita is due, and I do hope Sony realises that soon instead of focusing on alternatives for this, e.g. bundles. Their resilience is losing a number of potential buyers for the system, me included. Apart from this, the PS3 also seems to be holding them up, yet also steadily losing momentum, though sales figures for the console are still proving to be good enough. I doubt we’ll be able to say the same for the console if it carries on by itself until the end of the next year though – Sony needs a new entry and fast. Although, the recent unveiling of the significantly cheaper and slimmer PS3 Slim does look to be garnering quite a lot of potential figure- and spotlight-wise though – this is seeming to be a very good move on Sony’s part. This could gather quite a substantial number more of consumers for their gaming products, of which the title releases are still coming steady (which is more than can be said for the Wii) and thereby lift the sinking ship to last a few more rounds. But, regardless, I strain my use of the word “few”. So, in a nutshell, while a more minor amount of Sony’s financial trouble can be attributed to performances in their gaming division, there is still a very significant decline in the sector – but not quite enough for them to give up the game just yet, especially seeing as there is still no word on their entry against the Wii U in the upcoming eighth-gen race. Unless they’re running out of ideas…

To end this: Nintendo is definitely not going to pull out with the kind of leverage they have behind them – properties and finances most notably. Sony, on the other hand, may be facing huge monetary distress, and a few dips in their gaming division (especially their loss of significant first-party IPs) but that doesn’t render them handicapped either – with the PS3 Slim able to keep them afloat for a while and buy them more time, when their ultimate weapon against the Wii U is unleashed, I think they’ll see an extreme abolition of all their problems in a considerably short time. As for here and now though, we need to get our priorities straight: it’s definitely not Nintendo and their games we should be worrying about right now at all – it’s Sony.