GAMING BLEND

Namco's Fiscal Results Prove You Don't Need To Sell 5 Million SKUs To Profit

By William Usher 2013-05-10 15:10:09 discussion comments
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Some companies have been going on a lamenting spree about their games: big titles that moved between 3 and 5 million units that still wasn't enough to post a profit for the publisher. Other companies actually understand what the video game business is about and have moderated expenses so that they actually profit.

Namco Bandai is a company that fits into the second category, with Tekken Tag Tournament having moved 1.5 million SKUs, Naruto: Ultimate Ninja Storm 3 moving a million SKUs even and Soul Calibur V moving 1.05 million SKUs, pushing Namco's revenue to an all new high. In fact, the company hasn't managed such positive numbers since March, 2008.

I'm sure a lot of the consumer slip-ups by arch-rivals like Capcom probably helped Namco out a lot, since their software sales is what was leading the company's profits while merchandise and arcade revenue was down.

According to GameIndustry.biz, Namco Bandai's full fiscal sales came out to 487.2 billion or $4.8 billion USD. The company managed to net an actual profit income of 32.4 billion or $320 million. Namco actually puts some other publishers to shame, who spend inordinate amounts of money in ridiculous sectors of their own business, such as $747 million dumped into marketing by the two time reigning champ as America's Worst Company.

Namco Bandai basically proves that you don't need to sell 5 million SKUs the first month out in order to stay profitable. What's more is that if you look at the Metacritic user scores between a company like Electronic Arts and Namco Bandai, you'll clearly see that unlike the biased, unreliable and wholly deplorable gaming media sector, the average user actually appreciates Namco Bandai products a lot more than they do EA's titles.

Dead Space 3 on Xbox 360 has a user rating of 6.2 where-as Tekken Tag Tournament 2 on Xbox 360 has a user rating of 7.6. Namco Bandai's Ridge Racer Unbounded also has a user rating of 7.7, where-as Need for Speed: Most Wanted has a user rating of 5.2.

Clearly, the people who actually pay for video games aren't entirely fond of EA's offerings. I would compare the Metacritic scores from major gaming media but that would be like trying to get an accurate gauge of how happy a monkey is after the zookeeper gives him a banana. The monkey's interest will always be dictated by the zookeeper.

Anyway, the only downside to this news is that Namco Bandai won't be besting their 2013 results for the 2014 fiscal year, as noted by GI.biz...
The publisher doesn't expect to match that performance in the current fiscal year, as it is projecting revenues to slip less than 2 percent, with net income falling nearly 20 percent for the year ending in March of 2014. One contributing factor for that is likely the reduced slate of titles Namco Bandai has on tap.

I'm definitely curious to see how Namco approaches and reacts to the next-generation of consoles, as well as if they have any plans to further establish their publishing influence on the PC market, beyond the odd port hear and there.
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