Nintendo set to make a loss on every 3DS
Salaries also cut
With the 3DS price cut imminent, it is claimed Nintendo will lose money on every console sold. The company is also forcing cuts on its employees, reducing salaries by up to fifty per cent.
According to Bloomberg Japan, the new 3DS price point means Nintendo will incur a loss on every console sold. We've already talked about how the hardware parts of a 3DS cost just £60 and with the new price of the console still more than double that, it would seem someone's been doing some ambitious maths.
Cuts on the cards
However the bean counting goes, Ninty has changed its tune about public ignorance bearing the blame, and now holds itself responsible for slow sales. Head honcho Satoru Iwata is even taking a huge reduction in pay, Kotaku reports. His salary - currently about £1.2 million a year - is set to drop fifty per cent, while other directors including Senior MDs Shigeru Miyamoto and Shinji Hatano are taking 30 per cent cuts.
Hard times at Nintendo then. The 3DS price reduction comes into effect from 12 August here in the UK. Early adopters can register for the 3DS Ambassador Programme, rewarding consumers who purchased the console at original launch price with 20 free games. ®
for the big wigs taking some cuts. I have heard this is pretty typical in Japan, though, the company heads actually taking responsibility for their mistakes and the health of the company.
Here in the US, companies that have trouble, the CEOs and bigwigs get huge pay *raises* for "sticking with the company during this troubled time, and trying to turn it around" or some such excuse, even in cases where the bigwigs clearly caused the problems (as opposed to cases where the company's done everything right and sales have just dropped due to the crap economy.) They make damn sure they have a "golden parachute" clause so if they do get fired or quit, they get a huge cash payout. The people who get huge pay cuts, lose benefits, or get fired, are the ones who actually do the work for the company.
Try that article again sir :)
A point that a lot of people miss...
Agreed. I think it's nonsense that a site like iFixIt or some such looks simply at the BOM for a product, concludes that an iPad or 3DS costs only 20¢ in parts, and then sites like The Reg quote that as some Holy Number that is a sin to surpass.
Additionally, last I checked it may be unfashionable, but not yet illegal, to make a profit on a device.
That is not to say, of course, that the 3DS was not, shall we say, on the premium end of pricing (Nintendo admitted as much at launch), but market forces have moved the Hidden Hand and Nintendo has reacted, as it should, by bringing the price down to what the market will bear.
As long as it is the millionaires taking 50% cuts I am not angry because I am sure they will scrape through.
As long as the poor sods at the lower end aren't getting financially massacred.
Killer app not out yet
The problem with the 3DS is, the killer app isn't out yet.
I'm still waiting on the Animal Crossing 3DS title.