Nintendo hasn’t had a great couple of years. As sales of its Wii console slowed and the 3DS stuttered a little bit upon its release, profits were down last year. Critics have been quick to turn on the company, claiming that their bubble is bursting. While it’s certainly not that bad, it’s not exactly ice cream and sunshine either.
The good news is that Nintendo is back in profit. They made a net profit of 7.1 billion Yen (~£46.8 million) in the last financial year despite their net sales being around 1.9 per cent down on the last financial year. That’s a significant improvement on their 43.2 billion Yen (~£285 million) losses of last year and they are projecting a much better year to come, making a net profit of 55 billion Yen.
The Wii U and the 3DS both failed to hit their projected sales numbers. In the case of the Wii U, which has a “negative impact” on profit margins – basically it makes a loss per unit sold, that’s not a direct problem for this year’s figures. But it’s not hugely promising for the year ahead because, as we all know, more consoles sold means more software sold and that’s where profit columns can see a healthy bump.
Nintendo sold 13.42 million Wii U software units and 3.45 million hardware units. They’re projecting a further 9 million console sales in the coming financial year, along with 38 million software units sold (the figure for software includes bundled items).
3DS numbers were a little short of the 15 million that had been projected, selling a total of 13.95 million last year and a total of 31.09 million over its lifetime. Software for the 3DS is doing a little better too, with 49.61 million units sold in the last financial year bringing the total over its lifespan to 95.03 million. Nintendo expects another 19 million hardware units and 80 million software units sold for the 3DS in the next year – quite a jump on this year’s figures.
Critics will no doubt rush to present this as doom and gloom for Nintendo. The Wii U sales aren’t exactly inspiring and everything is just a little flat across the board. But the truth is that this is an improvement on last year and they expect that upward trend to continue into next year. They’re still operating at a loss on the Wii U – something which will improve over time.
It’s also just been announced that Satoru Iwata has been given the additional role of CEO of Nintendo of America. Reggie Fils Amie, President and COO of Nintendo of America will report directly to Iwata, who is also Nintendo’s overall President. Former NoA CEO, Tatsumi Kimishima, will return to Kyoto and take up the role of Managing Director of Nintendo.
Source: Press release
cc_star
Nintendo will be in a position to pricedrop the Wii U ahead of Sony & Microsoft’s releases, the pricedrop will coincide with the release of the usual Nintendo favourites and everything will be hunky dory for them in the Christmas quarter, especially as Mommy won’t be buying little Timmy a £400+ behemoth of a console.
Eldave0
^^This. I personally sold my Wii-U on as I got bored waiting for the big releases (obviously that is 99% my fault for buying the console on day-one rather than waiting a bit) but I don’t doubt for a minute the Wii-U will find its feet by Xmas this year. The PS4 isn’t likely to be here by then and the new Xbox will be pricey, making Ninty the sensible option for most families/people on a budget.
Alex C
Chris is spot on. When people see PS4 is £400 (or £200 with a monthly sub) or whatever, and the Wii U is half that with Mario, Mario Kart and Zelda, Nintendo will have a ready made market.
djhsecondnature
That’s assuming a) the PS4 will be that expensive (with or without a sub) and b) that the Wii U will get a 33% price cut. I don’t see either of those being true.
Alex C
I see both being very true.
jimmy-google
Or they see the PS3/Xbox is less than a Wii U have buy that. The could well be another PS3 price drop before Christmas. Of course they could also just buy their kids a cheap tablet instead of a console altogether.
There’s still the issue that many parents don’t see the Wii U as a new console due to the muddled advertising from Nintendo.
djhsecondnature
@Alex – I can see the PS4 launching at £400, but subbed at £150 with a 2-year contract. But I don’t see a £100 price drop in a year for the Wii U. £50 yeah, but not £100.
Happy to be proved wrong on this though of course. Cheaper consoles are better for everyone :-)
Anubis2097
“Mommy won’t be buying little Timmy a £400+ behemoth of a console” but Daddy will.
KeRaSh
Just got a 3DS XL on Saturday and I’m loving it.
The current line up is great for new 3DS owners and the outlook for the rest of the year is awesome.
Now that the 3DS ball is rolling, they will have to shift their focus on the Wii U in time to undermine Sony’s and MS’s launchs.
Kennykazey
E3 brings with it a new Mario, Zelda, MarioKart and Smash Bros. Big system sellers all of them.
jimmy-google
Nintendo alienated many “core” gamers with the Wii and the Wii market seems to be or has moved on to tablets & phones for their games. I don’t see what Nintendo has to offer them. They need something like new a Pokemon or Wii Fit of this generation that can be a new cash cow for them. They got the “fickle” market with the Wii but that market moves on quite quickly to the next big thing. At the moment that’s tablets but they move on from that before long.
I think they’re heading back to gamecube-ish levels of sales, the hard-core group that love Nintendo IP but the Wii U is already missing out on big third-party games which means it’s not an alternative to the other next gen consoles.
bunimomike
Lovely article, Peter. Level-headed and explains it all nicely. :-)