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Nintendo Profits Suffer, Says GameCube Nearing End
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happening
posted by: Aaron Stanton
publisher: Nintendo
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date posted: 03:34 PM Sun Oct 9th, 2005
last revision: 02:11 PM Thu Oct 13th, 2005


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Click to read.BBC News is reporting that sales of the GameCube have dropped substantially in the US, and while the DS and GB Micro have sold well, development costs for the Nintendo Revolution have taken a serious toll on Nintendo's operating profits. Pre-tax income for the company has fallen nearly 41% since June, according to BBC. This still makes them more financially stable than Sony, which has posted substantial losses over recent years. Though they're making less money now, Nintendo is still operating at a substantial profit.

Microsoft loses money on its Xbox division, but props up the operation with profits from other business ventures.

In a recent interview, Nintendo's senior managing director Yoshihiro Mori said that, "It looks like the (GameCube's) life is nearing its end."

This news comes after BBC reported that Sony will be laying of 10,000 employees by 2008 in a move to reduce expenses and make themselves more competitive. Both Sony and Nintendo face a formidable foe in Microsoft, the largest technology company in the world and the most recent entry into the console market.

As the current number one home console maker, Sony seems to be Microsoft's primary target. Nintendo, on the other hand, makes most of its money from portable units like the Game Boy Advance and the Nintendo DS, systems which Microsoft is not currently competing with, though Sony is with the PSP.

Traditionally, both Sony and Nintendo have relied on the Japanese market, which has been unenthusiastic about Microsoft's offerings, to help shield them from the software giant's attacks. However, recent data shows that Microsoft has managed to generate a substantial amount of interest in their upcoming Xbox 360 in Japan following recent game conferences in the country. Is this an indication that Microsoft is making progress?

There's been some suggestion that Nintendo hopes to maintain a non-compete style policy by introducing products that are not viewed by the consumer as in the same ring as the competition. The Nintendo Revolution operates on a controller that many think set it apart from either the Xbox 360 or the Sony PS3 in terms of gameplay and price, making it able to co-exist with either system in the home, similar to a portable console like the GBA. If this were the case, Nintendo would not be trying to defeat both Microsoft and Sony in the home console market, but instead just Sony in the handheld market.

Sony, already struggling to maintain market share, appears to be willing to take on both Nintendo and Microsoft head on.

When we reach the end of the next generation, it'll be interesting to see who remains standing.

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