Nintendo Expected To Post Crushing Q2 Losses

Industry giant Nintendo will be posting its Q2 financials tomorrow morning and if reports from Japanese newspaper Nikkei are to be believed, the company could be posting landmark losses of up to ¥100 billion, in contrast to Nintendo’s ¥55 billion forecast for the period between April and September 2011.

Foreign exchange losses (80% of Nintendo software sales are made overseas) and the financial failure of the 3DS are said to be the two main constituting factors, Nintendo having to slash the price of its newest handheld in August by a third to draw in consumers.

Source: Reuters

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24 Comments

  1. holy dire financial quarter report, batman!

  2. That’s whats happens when you don’t release games for your 2 systems :).

    • It’s really put a pounding on the 3DS though when we start seeing Mario Kart, 3D Land, Luigi’s Mansion 2 etc. sales may well pick up.

      What concerns me more is the Wii U.

  3. Wii U….final nail in the coffin?

  4. “It doesn’t print money” then any more?

  5. Mario Kart 7 will make that back in a minute or two.

  6. Nintendo have sold their soul to the Casual market with the Wii and DS, but it is just that, a casual market.

    People are using their phones for casual cames now, why pay £35 for a game when you can pay 69p

    They have managed to alienate core gamers with their enforced waggle, games too easy, lacklustre online facilities, fun for the whole family approach.

    The sad thing is, the 3DS has some amazing games on it, and it’s the one struggling.

    • I was going to say something similar.
      Not one gamer I know has only 2 or 3 games for their console, I’ve lost count of the number of Wii owners I’ve spoken to with not even that many.
      Console sale is a one off profit, it’s games that keep the life-blood flowing.
      Nintento pretty much alienated the “traditional” gamers for the most part, selling their souls for the casual market and becoming “trendy”. They’re now learning a harsh lesson in what happens to trends.

      Not shedding a tear about this, with their profits from earlier years they can cover this. But anobody with and commercial/finance background should have seen this coming a while ago. Nintendo seemed to fall victim to the “Sony PS3” affliction thinking people will buy anything they put out because of their past success. Sony seemed to have learnt the hard way, now lets see if Nintendo do as well.

      • “Not one gamer I know has only 2 or 3 games for their console”. Technically I only have 3 ps3 games at the moment as I trade mine in to pay for other ones ;) I take your point though (besides I have well over 15 xbox360 games lol)

      • Generally if people have more than 1 console they have a “preferred” machine that has more games than the other.
        That’s why I didn’t mention a specific console as I was referring to any “non-Wii” console, at this stage generally the PS3, 360 or both.

        I suppose I could have said “the type of gamer who buys a PS3 or 360 over a Wii” to be more precise

      • Although I know there are arguments that Nintendo usually succeed with whatever they do, but as ‘innovative’ as the Wii U is (not like the Dreamcast had such ideas), it’s implementation like the 3DS is very worrying. It seems all again prepared for Nintendo and no other developer, unlike platforms such as PSN where developers and games are actively supported and promoted.

    • Have to agree with the above.

      The Wii U seems a deseperate attempt to reconnect with the core gamer, but it is too little, too late.

  7. Zelda:Skyward Sword, Mario Kart 7, Luigis Mansion 2, Kid Icarus, Mario 3D. I’m sure they aren’t too worried yet ;)

    Theres no denying though that there hasn’t been a noteworthy Ninty game in months and months.

  8. Nintendo you only got lucky with the Wii because it was cheap and most families thought it was better than the PS3 and 360.
    3DS is ugly and lame and Wii U will be out dated when PS4 and 3rd Xbox are shown. Wii U already is kinda an fail.

    • Bit harsh, considering that the Wii U is still in development. I think a lot of gamers may have brought the wii to catch up on Ninty’s libary of games. The 3DS does have potential even though i despise 3D, if ninty are clever, they can bring us some fantastic remakes of some of their older titles or rerelease entire collections on it.

      “3DS is ugly and lame”, sounds a bit of a fanboy bash imo. ;)

  9. At this point in their hardware lifecycles – Wii/DS/DSi on the way out, 3DS still trying to get established ahead of its big Nintendo franchise releases – it not really surprising that revenue is down.

    Add the loss of revenue from the 3DS price cut, on-going development costs for the Wii U and their foreign exchange woes and the surprising news would be that they’d even managed to break even.

    Microsoft and Sony were doing no better (cf. much worse) during their own last transitional phases between hardware cycles.

    • This is true – I seem to recall a certain beloved black box (nothing to do with airplanes or the song ‘Ride on Time’ either before anyone points that out!) making losses month after month at the beginning of its lifecycle.

      I actually have no idea if they have even made up the losses now tbh.

      • Not really the same thing.
        Sony and Microsoft have always sold consoles at a loss and recouped (or attempted to) their losses via game sales and later console sales (after manufacturing efficiency increases lead to reduced costs without an equivalent decrease in console price). The consoles are loss leaders and the games/accessories make money.
        Nintendo follows a different business model by selling their consoles at a profit from launch then making even more money selling games. Hence why they survived so long even after the poor showing of gamecube and the like, everything they sell makes them money.

        So for them to require a noticeable price-drop weeks after launch and (if reports are to be belived) sell the 3DS at a loss that would be a massive departure from their usual “sell everything at a profit from the start” business model.
        So comparing MS/Sony making losses on their hardware to Nintendo is comparing chalk and cheese, in the first instance hardware losses are expected and part of their business model, in the second it’s a massive departure from their long-standing business model and new territory for them (and it’s highly likely they didn’t even plan for this scenario as it’s such a departure from their normal business processes).

        And remember, unlike Sony/Microsoft, Nintendo doesn’t have a non-game business area to support their gaming division.

        Although the interesting question is how much of this loss is uncapitalised R&D on the Wii-U.

      • I’m pretty sure the NES and possibly SNES were sold at a loss.

  10. 100 billion yen – I don’t even know how much that is.. I’ve got £15 on me at the minute, anywhere near..?

    • I think 100 billion is the same as one hundred thousand million, meaning 100 billion yen is about 820 million quid, I think.

      • That’s if 1 yen is still about 0.82 pence (£0.0082).

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