Nintendo is trying to get people to buy the new Wii U, but it just isn’t working, according to recent sales numbers. Now, the Japanese gaming giant is hoping that helping developers port their smartphone content to the home gaming console with conversion software will help entice buyers, according to the Japan Times.
Smartphone apps on a home console isn’t a novel idea: Sony began encouraging devs to bring their mobile phone hits to the PlayStation network a while ago, and continues to add mobile-first titles to the ranks of the Vita’s portable library. But there’s nothing really indicating that’s making a major difference in terms of attracting customers. After all, why would people seek out those titles on consoles, portable or otherwise, when they’ve already got myriad devices to play them on natively, including the iPhone, Android smartphones and the iPad?
Nintendo looking for ports of smartphone titles is a quick and dirty way to build out a larger software library, and for developers, a way to at least explore a new delivery vector to reach customers they may not already be reaching. But it will probably be a limited audience, made more so by the fact that anyone who’s already a fan of the title on mobile would probably be disinclined to pay for it all over again.
Porting is also a strategy that hasn’t really seemed to have been successful for anyone so far. BlackBerry has encouraged developers to port their Android apps over to BB10 using its own super-simple tool, which by all accounts takes only a few minutes to do its magic. But even still, it’s finding it hard to get developers on board, and that’s going from one mobile platform to another. Incentivizing conversions for mobile devs to bring their titles to a home console will likely be tricker still.
It’s been brought up before, but it bears repeating: Nintendo would probably stand to gain a lot more by reversing the situation, and porting its own blockbuster titles to other platforms, the way that Sony has flirted with doing, and the way that other publishers like Square Enix and Capcom have fully embraced. Admittedly, neither of those are hardware makers like Nintendo, but arguably that makes things more imperative for the Mario creator, which is having a really rough go of its hardware efforts, with lots of money sunk into a brand new console just at the beginning of what has been a 10-year release cycle in the past.
I wouldn’t mind having something like Dots on my Wii U, if I had or cared about one, but it’s not going to convince me to go buy that console. On the other hand, I’d love Super Mario World on the iPhone (a legit version, not via emulator) and would pay dearly for the pleasure. You’ve got the funnel all wrong, Nintendo, and it isn’t going to bring the people back.
Nokia has just reported is results for Q1 2013 with sales of $7.6 billion and a non-IFRS loss per share of $0.03 (and a reported EPS of $0.09) — a mixed result compared to analyst estimates, who had expected a loss per share of $0.05 on revenues of $8.65 billion (€6.6 billion). That estimated loss per share is effectively half of what it was a year ago, when Nokia posted a loss of $0.08 per share.
Nokia’s operating loss was $196 million, and while that’s down into the red again compared the previous quarter, when it posted an operating profit of $557 million, it’s a very significant improvement on a year ago, when its operating loss was $1.7 billion. Similarly, operating margin for the quarter was negative 1.5%, a reversal on the 6.8% of last quarter, but much better than the negative 5.1% of a year ago.
Analysts had also estimated that Nokia would report sales of 5.6 million Lumia devices for the quarter, and there Nokia was right on target, noting that the 5.6 million Lumias that it has sold are 27% on last quarter. The company has been building out the range of handsets it’s been selling in the last quarter, extending further into midrange and less expensive models. Nokia is estimating Lumia sales of 7.1 million for Q2, another rise of 27%.
“Nokia Lumia performance is promising considering this is the weakest quarter of the year and the new low end smartphones were not yet out,” noted Francisco Jeronimo, an analyst with IDC.
These are small but encouraging signs. To put these Lumia sales numbers in to context, a Reuters survey estimates that in the same quarter, Samsung has shipped 61.6 million smartphones, while Apple has shipped 36.9 million.
Here’s how Nokia’s results are breaking down for this quarter:
Devices. Not an overall great picture here. Device sales were $3.8 billion, down a full 25% compared to last quarter, and 32% compared to a year ago. Although Lumia sales trends are pointing in the right direction, they are still not big enough to offset Nokia’s other declines. The company’s feature phone business, which it terms simply “mobile phones”, were at 55.8 million units sold — down 30% on last quarter and 21% on a year ago. Within the smartphone segment, the last dregs of Symbian attrition also continue to give the company grief: Nokia sold 6.1 million smartphones in total, down 8% on last quarter, and 49% for the year.
Regions. Although mighty China, the world’s biggest smartphone market, used to be Nokia’s oyster, that time has long passed with the double juggernaut of Android and iOS taking away appetite for Nokia handsets. China saw the biggest drop of any region for Nokia in terms of sales by value and volume. The company reported $334 million in sales in Greater China, down 56% on a year ago, and putting it just above North America in terms of market size for the company. North America has been Nokia’s weakest market for some time already; China coming to join it in the bottom ranks is new. Of Nokia’s 61.9 million devices sold in the last quarter, only 3.4 million of those were in Greater China. Interestingly, North America was the only market in which Nokia saw a small increase in sales compared to last year — up by 9%, as some of its carrier deals to carry its smartphones continued to work their way through the balance sheet.
Here. CEO Stephen Elop announced in February that its mapping division would rebrand as “Here,” dropping the Nokia name, partly so that it could better target cross-platform business. Indeed, not only does it power Amazon’s location services, but Nokia’s maps are also available for Android and iOS, in addition to Windows Phone.
Whatever Nokia wants to call its mapping division, the unit continues to be the smallest division in the company. It reported sales of $281 million, a decline of 22% both on last year and last quarter, with the margin on services currently at nearly negative 45%.
NSN. What a lot of the decline in devices has meant for Nokia is that its infrastruture business is suddenly looking relatively okay. Whereas Nokia Siemens Networks used to only yield sales that were half as valuable as Nokia’s devices segment, these days they are more level with each other: NSN sales were $3.7 billion, while devices were at net sales of $3.8 billion. More importantly, NSN is posting a profit: $4 million. Yes, it’s small but again relative to the rest of Nokia’s balance sheet, this stands out. It’s also the only division with a positive margin, of 0.1%.
Some of these results were forecast by Nokia itself. In its Q4 2012 results Nokia posted better-than-expected results, with 4.4 million sales of its new Windows Phone Lumia smartphones and sales of $10.7 billion, but it also warned of a weaker Q1.
At the time, Nokia said it expected operating margin to be negative 2%, plus or minus four percentage points, citing “competitive industry dynamics” that have negative impact on smart devices and mobile phones. In other words, ever more competition from Apple and Samsung, which continue to keep a stronghold on smartphone sales, even as Windows Phone models, led by Nokia, are seeing gains. Indeed, Nokia noted that although Lumia smartphones continue to “ramp up” this may not offset larger consumer demand or the wider economic environment.
It also noted last quarter that it expected Location & Commerce non-IFRS operating margin in the first quarter 2013 to be negative “due to lower recognized revenue from internal sales, which carry higher gross margin, and to a lesser extent by a negative mix shift within external sales.”
We’ll be listening in on the call in just a while and will either update with more detail here, or post separately if the news merits it.
The Model S just got a little more expensive. Tesla just announced that the company will no longer offer the least expensive Model S electric sedan. Per a Tesla press release, since its launch, only 4% of buyers opted for the 40 kWh model with its paltry 160 mile range. Instead, buyers have spent the extra cash on the more capable and better performing models.
The entry-level Model S cost $52,400 after the US Government’s $7,500 tax credit. At that price the 40 kWh Model S provided Tesla with a relatively competitive price point, putting the Model S on par with a BMW 5 Series or Cadillac XTS. But Tesla’s sales numbers clearly show that buyers didn’t mind spending more cash to get more range and better motoring performance of the higher priced options.
Tesla will still deliver a 40 kWh model to those who previously reserved one — it will just be a 60 kWh spec electronically limited to only provide 40 kWh’s of range.
At first blush it seems like a raw deal, but it’s fair. With this model, Tesla is fulfilling its end of the bargain, plus, since the vehicle will be equipped with a more powerful battery pack, the car will be quicker and more responsive than the standard 40 kWh trim. In additional, it will come packing the goods to hook up to Tesla’s ever-expanding SuperCharger network — previously an optional upgrade.
In the future the additional 20 kWh can be unlocked for $10,000, which is the current price between the 40 kWh and 60 kWh.
This announcement came along with a side note of Model S sales numbers. Tesla indicated that Model S sales exceeded the target indicated in the mid-February shareholder letter, with sales currently at 4,750 units rather than 4,500. Apparently NYT vs Musk didn’t hurt the company after all.