Flagging GameCube hobbles Nintendo profits

Semiannual financial report shows 42-percent decline in console sales, strong handheld numbers.

Though Microsoft loses money on each of its current- and next-generation consoles, its rival Nintendo makes a point of profiting from its hardware. So when sales of the GameCube suffer, so does the company's bottom line, as shown in Nintendo's latest six-month annual report.

For the six months ending September 30, 2005, the company saw net income of 36.6 billion yen ($308 million), a 21-percent slump compared to the same period in 2004. While net sales fell just 6.2 percent to 176.3 billion yen ($1.4 billion), operating income plummeted 51 percent, going from 40 billion yen ($336 million) to just 19.6 billion yen ($165 million).

Slacking GameCube sales were a major contributor in Nintendo's flagging fortunes. From April to September 2005, the company saw only 8.5 billion yen ($71.5 million) in console sales, just over half of the 16.1 billion yen ($135 million) it had in the same period in 2004. The figure was dwarfed by Nintendo's 74.9 billion yen ($630 million) in handheld income for the six months, up from 61.3 billion yen ($512 millon) during the same period in 2004.

Nintendo blamed dismal GameCube sales on the fin de siecle of the current generation of consoles. "The market for the current generation of console hardware is becoming saturated and is approaching a transitional phase to next-generation consoles," read its report. "As a result, the overall video game market generally showed a declining tendency."

Strangely, Nintendo's handheld software sales suffered a year-on-year decline, falling from 65.1 billion yen ($548 million) to 59.1 billion yen ($497 million). Console software saw a less precipitous slump than console hardware, dropping from 26.7 billion yen ($224 million) to 20.7 billion yen ($174 million).

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77 comments
Kbs64
Kbs64

The Gamecube is a great system. It be nice to have more 3rd party support though. but Nintendo is great and somehow they survive. And regardless of their lack of 3rd party games. Nintendo sure knows how to "KILL" with their first party games. Nintendo sure is growing up from its kiddy appeal to more of an Teen gaming too.

InfernoLink
InfernoLink

I wait for the day when all the non-beleivers and doubters of Nintendo are weeping over the death of the XBox and Playstations along with all the other Heretics. It's only a matter of time. The Nintendo Revolution will be the Messiah of the Video Gaming world. All hail Nintendo and bask in their glory.

MilesTormani
MilesTormani

I personally say that the GameCube was a widespread mistake, on account of both game developers and gamers. First off, we all know that the GCN, officially, is the cheapest of all the systems, and has more or less remained that way. This allows them to score with the less priveleged market, but unfortunately, in this day and age, people seem to believe that price = quality. This is NOT true, and I wish that belief would've died with the Atari. You also forget that the GameCube CAN and HAS gone online. (PSO, anyone?) Developers and gamers alike neglect the online feature, which has BEEN there from the get-go. Also, as I am typing this, I recall multiple instances of hearing, even from Microsoft fanboys, that the Xbox 360 runs excessively poorly and is riddled with bugs. PS3 supposedly got pushed back to 2007 as well. There's also that rumored 'shell' that plugs into the Revolution controller, making it more like a motion-sensing GameCube one. (This would work really well with the N64 games online, as well as the backwards compatibility). Oh, and if we're going to go into shady backgrounds, Microsoft and Sony are equally shameful. Sony's VHS alternative, anyone? GameTrak? How about a multitude of crappy Windows Updates? While am at it, why don't I mention INTERNET EXPLORER!? While it's true that the GameCube leaves something to be wanted, Nintendo's not the only company that makes mistakes. Open your damn eyes for a change.

Smakaveli
Smakaveli

I recently purchased another Gamecube, after my orignal being destroyed by misguided children. Nintendo is still #1 in my book.

lilweightlifter
lilweightlifter

The gamecube's drop doesn't surprise me because it is getting out of date. Same with the XBOX and PS2. The fact that the handhelds suffered does surprise me. Especially because of how awesome the DS is.

everyl
everyl

I have One . In fact I bought two. The reason people do not by the GC is because its not online. I don't think thats a good enough reason to hate the GC. Wait till Zelda and the Rev are released, then Nintendo will be back.

SavoyPrime
SavoyPrime

This isn't really a shocker since the Cube hasn't had any must-own titles in a very looong while. The Legend of Zelda: Twilight Princess would have made a bucket load of money for them this holiday, but I guess it will be making a bucket load of money for them in April instead (or whenever the hell it comes out).

Willo_10
Willo_10

Well, though people say "Poor Ninty, Oh look their sales are down what a pity," It is expected and hey as long as they make more money than the others, than who needs marketshare, if they make more profits than that means they aint going no-were. Anyway DS Sales are strong, even up against sony, and once Zelda:TP is out, profits will sharply rise.

Morfanos
Morfanos

Just a note to this news writer (Tor Thorsen): "Nintendo blamed dismal GameCube sales on the "fin de siecle" of the current generation of consoles." "fin de siecle" doesn't make any sense here has it translate end of the century. I think the words you were looking for are : Fin de CYCLE which would translate into end of cycle.

Lasafrog
Lasafrog

DS has really gotten me excited about Nintendo again. Though I got tremendous enjoyment out of a number of GC titles, I have to admit that it's been nearly a year since Resident Evil 4 became the last Cube game to get me excited. After what felt like an eternity (or at least 6 months), the DS I got on day 1 suddenly blossomed like I couldn't have imagined. I owned only Mario DS and that quirky Feel the Magic for the first half year of the DS' life, but suddenly, my library is exploding. Meteos is a blast. Nintendogs never gets old. Castlevania DS is my favorite one to date (and that's saying something!). Metroid Pinball is extremely fun in short spurts. Mario Kart gets me some refreshingly FAST matches online... while I'm on the toilet :) Saving the best for last.. Advance Wars DS has thus far owned over 50 hours of my life this year (which it actually gave me an award for! Woohoo!), and I wouldn't consider giving a single one back! With the upcoming Animal Crossing WW, the undoubtedly great Mario and Luigi RPG this very week, and Metroid being given the proper treatment soon, I am extremely pleased with not only the quality and consistancy of these games, but the wonderful diversity in how each one plays. I mean, really, I can't recall the last time I had this many gameplay choices on a console... and they all fit in my pocket! This little wildly innovative thing has my wheels really spinning as I wonder what the big "N" is conjuring up for their next console. Something tells me we haven't seen anything yet.

ghostadv
ghostadv

kyliac, Nintendo has said that the day they stop making consoles is the day they stop making games. So if they pull out of the console race, Nintendo is done, no Sega situation going on. You won't ever see a new Nintendo title again. Anywho, this isn't surprising, seeing how the next gen consoles are sorat close, and the fact that the GC was the worst of this current console race. I certainly hope the Rev does better than the GC did

kyliac
kyliac

Don't worry be happy. Nintendo hasn't made a great console since the Super Nintendo. Their first party games (Zelda, Mario & Mario Cart, and Metroid) are awesome besides that the design of both the 64 and GC controllers were horrible. When I had to pick between my 3 systems if it was on all 3 Nintendo was at the bottom of the list. Look at it this way. You can spend less money on a system you are only going to buy a few games for and instead save your money for something else. My Fiance and I own all systems and the GC is only pulled out occasionally. Now if your argument is great family games then Nintendo still loses because "Dance Dance," "Karoeke," and " now the awesome "Guitar Hero!'" With that line up you can entertain any guests. Which is why Sony is still #1 all 3 of the games I just named are 3rd party developers which Nintendo doesn't have. I would rather just buy 2 consoles instead of 3 and let Nintendo do what they have done so well over the last 10 years. Make great games!

locustsux
locustsux

I beggining to worry, what if Nintendo becomes like Sega? That would totally suck ass

Themage
Themage

I love the cube and have the most games for it , I cant see why nobody buys its. Too many people listen to the "marketing" of nintendo is for kids and there is this attitude that if you like nintendo your a kid. But this news of sales drop right before a next gen console launch is to be expected. But i hate it when devs drop the cube just cause it does not have online or whatever there reasons.

GunslingerMan
GunslingerMan

Ok whatever the rev is near anywase . Humm, I wonder if nintendo will ever come back at least to # 2 . Well atleast they have a better profit than sony and M$

Zilch06
Zilch06

Poor Nintendo. I hope the Revolution perks them back up.

dadesigner
dadesigner

What Nintendo looses in console they gain in their DS. The DS is doing so awsome now with Wi-Fi connectivity and it's only going to get better with Animal Crossing: Wild World and Metroid Prime: Hunters in March and lets all not forget The Legend of Zelda: Twilight Princess coming out soon. Sales for the CG will go up by then and Revolution creeping up in a fast and steady pace.

bryehngeocef
bryehngeocef

I have 2 GameCubes in my house. One for the living room, and another to play Animal Crossing in bed. One I bought recently as part of the Pokebundle, and one of the first jet black consoles complete with the now missing component out. I think one reason they don't sell alot of GCNs is that they don't break half as often as the other Sony's. I've owned 2 PS2s, and both ended up dying within a year. I also own a 1.6b XBOX that runs great, but I've had more than one friend complain about broken boxes. As for the games...anything cross-platform should be played on XBOX. I own about 30 games for it, and 15 or so for the Cube. To me...Most 3rd party titles for consoles fit into cookie-cutter genres though, and, as fun as they may be when you spend that first weekend with them, they really don't have the charisma that Nintendo's characters bring to games. It's still fun to run through Luigi's Mansion on a rainy afternoon. You can play Animal Crossing for years. Paper Mario has to be a prime example of engaging, funny, storytelling and gameplay. More recently Fire Emblem has shown that simplistic looking, well written games with solid mechanics can more than make up for blood and bullets. I can play Nintendo's games with my wife and kids, and keep us all entertained. There really is something about Nintendo's games for everyone. There are still quality games coming out for the Cube, and I'll get them untill the end, because I know that I'll probably enjoy them again years from now, just like I still enjoy playing the NES, SNES and N64 games. Every system has strengths and weaknesses, Good and bad games. Sony has excellent 3rd party support and alot of great role-playing games you can't find anywhere else. XBOX1 has XBL, and the most powerful hardware. The GameCube has Nintendo. Third party support is alive and well at Nintendo too. So is something the other guys are missing. Creativity. Yes, Mario has been in a million games. The thing is, that 999 thousand of them are outstanding. The DS is a fantastic outlet for developers also. Nintendo's in-house stuff is stellar but there's also games like Sonic Rush, Phoenix Wright, Castlevania and Tony Hawk. Can't wait to see the NDS/REV connectivity. The Revolution will also have inputs for a standard controller. Something alot of people seem to overlook. As is the fact that cross-platform development will be very, very expensive next generation. You'll still be able to play Madden on the Revolution, but I think you'll see all 3 companies with alot more exclusive titles. As a 30 year old gamer that's had most of the consoles to hit market. I can safely say that I'm sold on Nintendo. They make quality product, have excellent support, and a genuine love for gaming, and fun in general.

PMB960
PMB960

Why are some of you saying nintendo is losing money.Th ey aren't losing money they are just making less. Thats right they actually make money. Microsoft has yet to see a profit in their xbox division since it came out. Its mainly because of st party games. They might actually sell more revolutions than people think too because if it launces at $200 people wouldn't mind getting a PS3 and a revolution. I mean it would even be cheaper than getting a PSP.

SmillingMan
SmillingMan

Just wanted to add a little comment...what is up with everyone saying that GC launched to late to even be a contender?!? It launched a few weeks later then Xbox. From the way some of you are talking, you would think that it launched a year after. Plus, if the time a system launches matters, then the Dreamcast should have been at least 2nd in the race so launch time has very little to do with it(it does have some but not as much as some of you think).

Robyf
Robyf

Do you really want to know why sales go up and sales for ps2 and xbox games and systems have been going up,and nintendo been going down it's because Nintendo have just been putting kids games like zelda and mario, the same old stuff over and over, but what really disapointed me from buying a GC is beacuse i heared from some where that GC is not going to put violent games. i was going tobuy a gamecube but i have't seen any interesting games, well except for RE4. what nintendo should do is make rated M games. not just kids games. they should just copy sony and xbox like good and fun games like GTA, Manhunt ECt. But that is just a example.

Gamefanatic11
Gamefanatic11

It was to be expected considering that, to begin with, the console didn't have the best fan base. Eventhough I am a proud GC owner myself, the console at times did let me down, particularly in game selection, so I can only imagine the high level of disregard for the system that others have. And it did have a decent run for the past 4 or 5 years, so really it shouldn't be a surprise, especially with one new console available and a few more on the way.

FRieDRyCe
FRieDRyCe

..... I couldn't say it wasnt unexpected. I bought the GameCube at launch and had the PS2 before it. Then I got a Xbox. I found the GameCube the least fun console this gen. (But in the beginning it was 2nd best back Xbox was just starting to kick in). Anyways from this date I have the least GameCube games. Its not because they are bad. I just lose intrest. Some were really bad tho. Zelda WW that was a really bad game. The only good side I see from that is I got a Master Quest disk (which in my opinion justified the 50$ instead of the actual Wind Waker game.) There were games that I enjoyed too though..... like Pikmin (a bit on the short side), Metroid (Fun but lost intrest at 50%), Resident Evil 4 ( Expected to be good seeing as how long it took to dev), Ethernal Darkness, RE:Remake, Metal Gear Solid, Rouge Squadren, etc. As you could see from my list the GameCubes golry days have long since pasted and it just couldnt continue to put out the games that it used to.

sorata07
sorata07

its the begining of the new generation, console slumps are obviously going to happen

AAAAAAAAHHHHH
AAAAAAAAHHHHH

Don't care what anyone else says. LONG LIVE NINTENDO!!

BlissfulGopher
BlissfulGopher

Hear hear, gonzalezj1 & Lasafrog. You both summed it up perfectly!

Lasafrog
Lasafrog

Oh, and nicely put gonzalezj1. My thoughts exactly.

Lasafrog
Lasafrog

Hard to ignore the utter lack of games lately, but all things said and done, I own 30 games for my GC, and most are fantastic exclusives. Zelda : Wind Waker, Metroid Prime and it's sequel, Pikmins, Monkey Balls, Resident Evil zero and 4, and don't forget Eternal Darkness.... These are all fantastic games, and exclusive (at least for a time in the case of RE4). At 30 years old, I seem to be a rare type that cares more for depth and plain old fun than I do realistic violence and such. Don't get me wrong, I've played the living hell out of the GTA series (and still on PSP when I break away from SOCOM online...), but something about the titles above that were so easy to jump into and so hard to put down. I own plenty of Xbox and PS2 games as well, but the list of truly memorable titles on those is a bit smaller. And don't even get me started on my huge GBA and growing DS library, which for a busy husband and father have become the only way I can usually get some game time (ahem, sitting on the pot :) )

gonzalezj1
gonzalezj1

"The Gamecube is too kid-friendly." If you've said anything remotely resembling the above phrase then, my friend, you have sold out. That's right, you've sold out - and bought into the corporate image machine. The Gamecube wasn't sexy enough for you; no, it was too small and cute. You needed your gaming experience to make you feel manly, with lots of blood and objectified women.* You couldn't stand to play a game with bright colors and cartoonish characters, despite the fact that these (Nintendo's first-party) games have consistently been some of the best and most entertaining games being made. I mean, what if someone saw you playing "Animal Crossing"? They might think you were a wimp! or a little girl! Never mind that it still has what is probably the strongest fan-base of any single non-online console game, an impressive feat considering its age. Well, congratulations, you have become an adult; you are manly. It's a good thing you were able to avoid all of those baby games and instead play only the grown-up, big boy games. Sigh, if only the Gamecube could have delivered - with a bigger... disk. *note - I like blood and objectifying women as much as the next guy. I also like to jump on a goomba every now and again.

kyliac
kyliac

Nintendo has been in trouble in the console market since they decided to stay with the cartidge system on the 64 and in turn lose one of the best 3rd party developers to their upstart rival Sony. I hate to say it but I see this new console as the last that you will see from Nintendo. The only thing keeping Nintendo profitable is their hand-held division. Which until recently they had 100% market share in. Even if Sony takes 20% of the market that adds to up to a large loss in revenue for Nintendo. With no 3rd party support and no online there is no way for Nintendo to compete successfully in the next generation war. Soon, just like Sega, you will be playing Zelda on your Xbox or your Sony within the next couple of years. The only way for Nintendo to stay successful is for them to stay with what works for them which now is down to only handhelds. On a positive note we will only need to buy 2 consoles instead of 3 to get all the great games! :-)

Jubei_Hikari
Jubei_Hikari

Nintendo isn't making matters better with their launch of the Revolution which looks like it will be a Gamecube v.2 instead of a Next-Gen console. They will probably win some of their fence riding fans back due to it's Super backward compatability. Either way Nintendo won't have my money unless I see more Zelda and Harvest Moon games ^^

Horatiomgc
Horatiomgc

well a square purple box those not help sales, thank god they made a change for the better with the REV

kainenable
kainenable

Well, I dont think this was a suprise to anyone. The main reason I didnt buy it was simply because it didnt have a good variety of games to play. Wheras the PS2 had loads. It didnt help that its online was almost non-existent and it used that wierd proprietary optical disc format. I have cautious optamism for the Revolution. Although I think it would really benifit from adding HD support. Is it that much more expensive to make an attachment for HD tv's? I just hope Nintendo doesnt get left behind again because they do not want to adopt technologies that the other 2 consoles will make mainstream.

cusoker
cusoker

So thier profits declined, so what, they at least made a profit from the console (hear that Sony and Microsoft?). The GC has GREAT games on it, but the majority of people think its a "kiddie" system b/c their fanboys without basis for why they like a console other than "IT ROCKS" or b/c it doesnt have GTA or the like. Just b/c it doesnt have as many "M" rated games as the other two doesnt make it a worse system. Dont knock down the Mario boys, they'll be back with the next gen. Lets hope they just get some better 3rd party support.

chaosreaper
chaosreaper

gamecube is a great system. people have nothing to say about most of the games except that they are kiddy. im 15 and ive found more fun with my gamecube than any other one of my systems. i am surprised that all people want to do is use killing to sell games while nintendo takes a different approach. too bad they're losing money -_-

ebonyflame
ebonyflame

Hopefully the already great lineup of DS games will get even better. And with GBA sales still going strong I think they will be okay. The big killer will be on whether or not they can get enough exclusive high quality titles for their next home system from 3rd party developers as they can only produce so many themselves. I am all for the super high production value and overall greatness of Nintendo produced exclusive titles but I would like to see some Metal Gear type games or Halo calibur exclusive games for the next Nintendo system I am buying. There are only so many more ways they can make Mario, Link, Samus & company better. As big a fan of these characters as I am, I really don't wanna see another Metroid title or Legend of Zelda game for at least another year or so. Mario however is overdue a proper adventure, not saying Mario Sunshine was bad, it was just an update of Mario 64 in a different land.

n2Deepeth
n2Deepeth

Contrary to popular belief, Gamecube is actually second to PS2 for current generation home console sales worldwide (Xbox may be second in North America, but it did terribly in Japan). The main problem I found with Gamecube is third party support. The first and second party games for Gamecube rock (like Wind Waker and Metroid Prime), but it doesn't have as much third party support as I hope it would have and as a result, the library isn't as big. I actually found that the controller was awesome for many games, and online play was there, but it wasn't really fully recognized. Launching so late was probably the biggest mistake because by then, the other consoles already had plenty of games and there was little incentive to buy a Gamecube unless there was an incredible exclusive game. Also, there are a lot of misconceptions about current generation consoles that make people buy certain systems (for some reason, I heard many people saying that PS2 is the most powerful of the current generation systems, even though most of the time, the other two consoles can outperform the PS2 when considering multiplatform games).

MasterMarcus
MasterMarcus

GameCube's decline was expected, like any console ''pre-next gen'', despite a great library of exclusives. As the transitional thing with Revolution begins, Nintendo can count on the DS success. Marioland should keep a good profitability in the forseable future, yet I don't see how it can garner an increasing share of the market.

Gr33nHippo
Gr33nHippo

not suprised with the gamecube sales low, but i am suprised with the handheld sales. been a lot of good ds games that came out over the past couple months, and ive decided to get a ds for christmas. probly lots of others wit teh same plan so im guessin the handheld sales will increase for christmas, especially with the new mkds bundle coming out soon.

gunmx
gunmx

The year-over-year decline in handheld software sales shouldn't be surprising--it is likely due to the aging GBA platform, whose market is pretty much saturated. The release of the DS was only last year, and the Micro/SP revisions were this year--I wouldn't expect either of these to immediately impact net handheld software sales in a year-on-year comparison as the new handheld needs more time to match the installed base of the old.

darklight941
darklight941

really not surprised about it. I mean there's been like what, seven good games on Gamecube? Most of those games became available to the other consoles after a few months so few people would really waste money on a console with games that they could get on the PS2 or XBox. Still, its sad that Nintendo has fallen so low, considering that they used to be the best of the best in the gaming industry, but now they're barely holding up to Sony or Microsoft in the sales or popularity of its consoles or games.

Cronaroth
Cronaroth

Well--if you have read comments the last few months ALL console sales are down due to the transition to the next gen---and Nintendo did actually have a BIG leap in sales back when it went to $99.99-and all systems (especially Xbox) do not have any titles coming anytime soon that are big---Zelda is in spring/summer of 06, FFXII is in late 06 at best, and Xbox can be considered tossed aside at this point due to the 360...all current systems are gonna slow down-and 360 wont really kill em due to the fact their are not enough of them to go around and the game development wont pick up til next year at best or at least til PS3 is out-face it though this gen is simply just dying, it's not only Gamecube it's all three.

mlwillin
mlwillin

Why should we care about NINTENDO when NINTENDO does not even seem to care about what the buyers want anymore. Besides i read that the guys that started it all with NINTENDO said they don't even play games anymore they don't have time. So they sell the crap and support it but don't even care about it just like it seems they don't care about the fans anymore. NINTENDO WILL eventually just deal with handheld gaming and abandon the consoles. WHY NINTENDO WHY DO U CONTINUE TO DESTROY WHAT WE FANS HAVE GROWN TO LOVE.

malkav145
malkav145

the article is right though. It is right now the ~5 year transitional phase, and nintendo needs to focus on the Revolution more then the Gamecube if it hopes to make a profit. From what i've seen the revolution looks like it could bea contender, consdiering the prices that the new systems and games will be. nintendo is sticking to the philosophy of gaming first and a computer for HD tv's second will hopefully lead to recovery.

linkdragon642
linkdragon642

Poor Nintendo... Well, they still dominate the handhelds, so it's good.

ngamer7
ngamer7

I agree with all of the GC supporters that most people judge Nintendo too soon. Let's take a look at why they may not be selling so many games and consoles. Both Sony and Microsoft have so much money because of other products not related to gaming that they can afford to take hits on profit. I don't know this for a fact but I would put money on it that they give third-party developers and publishers a bigger cut of the profit from games than Nintendo can afford to. That's why they have more third-party developers and why thay have more games. MACENTHE, I don't think you've heard of the DS. Its this cool Nintendo handheld that is completely different from any other handheld system that has ever been created. And, guess what, many developers love the thing and think it is a great way to try out there imagination just like they will for the Revolution. That is why I like Nintendo, they are really about trying to make your game experience fun even if they do want the money as well. Money is not all they have on their minds unlike Sony and Microsoft. Also, VICELIBERTYDRE, you pretty much make me sick. First, this topic was about the decline of HARDWARE sales, not GAME sales. Second, as I mentioned above, although it wasn't posted the lack of sales third party support, ETC. is probably from Nintendos lack other money makers. They are dedicated to games and don't use them to just get more money as Sony and Microsoft do.

exavior17
exavior17

Actually GC had online support if anyone would have bothered to use it. It had just as much support as the PS2. You buy an adaptor plug it in and if the game was designed for online play you could play online. However there was only about 2 or 3 games that made use of it. PS2 didn't have some PS live system or anything like X-box had. Yet it still had online games. It is like the HD for the ps2. It was there(at least in early versions of the ps2), used by a very few games, but in the end ignored by most.