Nintendo has experienced its first annual earnings loss. Overall the publisher reported a net loss of 43.2 billion yen ($5.32 billion), which is a lower loss than expected owing primarily to a weaker than expected yen.
Nintendo has experienced its first annual earnings loss with a 36.2 percent drop in net sales revenue from its last fiscal year due to slow sales of software and hardware in the US and Europe and the price cut of the 3DS.
Overall, the publisher reported a net loss of 43.2 billion yen ($532 million), which is a lower loss than expected, owing primarily to a weaker than expected yen.
Nintendo plans on turning its fortunes around over the next fiscal year by making its 3DS handheld profitable again, with plans to stop selling the 3DS at below cost by the middle of the fiscal year ending March 31, 2013. Its outlook also includes the release of New Super Mario Bros. 2 this August with a version for the 3DS, a new Animal Crossing to be released this fall in Japan, a new title in the Brain Age series to be released in summer, and the release of its high-definition console, Wii U.
These measures have raised the forecast for the fiscal year ending March 31, 2013 to 820 billion yen, an increase of 26.6 percent on the net revenue figures released today.
According to Nintendo's financial results briefing released in January of this year, income from net sales of Nintendo products has been in decline since 2008. The 2008 April-December period recorded net sales of 1,536.3 billion yen, which dropped to 1,182.1 billion yen in 2009, 807.9 billion yen in 2010, and 556 billion yen in 2011 – almost a third of the sales from just three years earlier.
Poor sales performance and a stronger-than-expected yen led to Nintendo revising its net sales forecast for the April 1, 2011 – March 31, 2012 period.
In the original forecast, net sales were expected to gross 790 billion yen, but this figure was later reduced to 660 billion yen in the January forecast modification. A year ago Nintendo expected to sell 13 million Wii consoles, 16 million 3DS handhelds and 11 million DS handhelds, but the sales forecasts for these devices were also cut back in January, with the Wii target reduced to 10 million units, the 3DS to 14 million units, and halving its prediction for the DS.
In the lead-up to today's earnings call, Reuters reported that Nintendo was facing an estimated 45 billion yen deficit for the business year that just ended. In the report, analysts claim that Nintendo is being beaten by smartphones and tablets – not only are consumers spending more money with these devices, they're also spending more time.
Analysts in the Reuters report suggest Nintendo shrink its hardware business and instead chase profits for its first-party titles like Super Mario on devices built by other firms, although one analyst said this is unlikely to happen unless the upcoming Wii U console is shown to be a clear failure.
The Wii U is expected to be released in the fourth quarter of 2012.
- Titanfall review: my buddy
- Street Fighter: The Movie — What went wrong
- Frozen Endzone hits Steam Early Access
- Titanfall's achievement lies in allowing the player to find fun in failure
- The final years of Irrational Games, according to those who were there
- Assassin's Creed 4: Black Flag Jackdaw Edition coming to EMEA, UK this month
- Why Watch Dogs went into hiding
- Tower of Guns - Overview video
- Bears are the enemy of art in Halfbrick's new game, Bears vs. Art
- Ouya may not be dead, but its long history of stumbles makes success unlikely
- Polygon Daily Off-Topic: Prepared for Titanfall? (Mon 10 Mar)
- Polygon v1.9 - Article Redesign
- WTB physical DS2 for PC in US
- More Pokémon Discussions: Redux
- PD Users: Defined at Last! (Humour)
- Anime, Cartoons, Comics! Plight Vol. 2, No. 5: The where I yet again break the rules
- Prepare for Titanfall (Xbox One)
- Game development
- Getting a PS4
- When can I buy this digitally for Xbox One?