Nintendo have made a comprehensive effort over the past months to prepare industry watchers for some relatively poor results. With the Wii no longer a figurative money-printing machine for them and the 3DS’ stuttering start prompting a rushed price cut, they were forecasting a net loss for the 12 months to 31st March 2012 of ¥65,000 million (£500.5m, $799.5m). Thanks largely to movements in the foreign currency markets it did not turn out quite that bad for them.
The unanticipated depreciation of the yen invalidated their exchange rate assumptions meaning that not only did the assets they hold that are valued in foreign currencies rise in value, when priced in yen, but also that every pound, euro and dollar we spent on their products was worth more to them in yen. Naturally these currency movements will also have helped Sony’s figures.
The result being that Nintendo’s end of year net loss was reduced to ¥43,204 million (£332.7m, $531.4m) or approximately a third less than they had expected. The other key financial measure frequently referenced is operating profit/loss and Nintendo’s operating loss for the last twelve months was ¥37,320 million (£287.3m, $459m) the first time in their history they have recorded an operating loss.
Hardware Sales and Forecasts
The 3DS has sold 13.53m units during their financial year. Those sales were split evenly across Nintendo’s sales regions with Japan, The Americas and Other (including Europe) accounting for 4.8m, 4.6m and 4m respectively. This brings its life-to-date total to 17.1m.
While last year’s price cut means that they are still selling the 3DS at a loss, they state that they are still on track to “cease selling it below cost” in around six months time. Their forecast for 3DS sales during the twelve months to 31st March 2013 is 18.5m consoles.
The DS family sold another 5.1m consoles bringing its life-to-date total to 151.5m. Nintendo expects DS sales to halve over the next twelve months to 2.5m. They sold another 9.8m Wiis leading the little white dusty box’s life-to-date total to reach 95.9m.
Their forecast for Wii sales of 10.5m this financial year includes sales of the Wii U which they state will be released “in Japan, the United States and Europe at the end of this calendar year”.
With the 3DS hardware becoming profitable again and the Wii’s successor on the shelves they expect not to be in the position of reporting another operating loss this time next year. While still forecasting a half year operating loss of ¥25,000 million (£192.5m, $307.5) they are expecting to turn things around before the financial year’s end and are expecting an operating profit of ¥35,000 (£269.5m, $430.5m). Time will tell.
Note: Exchange rates used to calculate USD and GBP values from OANDA. JPY/USD: 0.0123, JPY/GBP: 0.0077.