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Finance

Nintendo profits down 74% year on year

Thu 27 Jan 2011 7:15am GMT / 2:15am EST / 11:15pm PST
Finance

Net income of $603m for last 9 months, but predicts 15m first-month 3DS game sales

Nintendo has released financial results for the first nine months of its current financial year.

Net income was down 74.3 per cent to 49,557 million ($603 million) from last year's 192,601 ($2.3 billion).

The company claimed that this was "due to exchange losses totalling 84.4 billion primarily caused by reevaulation of assets in foreign currencies."

Revenues dropped 31.7 per cent, to 807,990 million ($9.8 billion) for the nine months ended December 31 2010, from 1,182,177 million ($14.4 billion) for the same period in 2009.

40.22 per cent of revenues derived from software, and 59.6 per cent from hardware. The Americas once again proved the primary territory, comprising 46.8 per cent of sales against Europe's 31.8 per cent and Japan's 16 per cent.

Nintendo observed that handheld software sales, especially Pokemon games, "continued to grow" and looked to Super Mario Galaxy 2, Wii Party, Donkey Kong Country Returns and New Super Mario Bros as Wii success stories over the last nine months.

"Holiday season sales were robust, especially in Europe and the United States, however sales did not reach last year's monthly record sales in the US in both DS and Wii hardware."

Worldwide sales of DS hardware were 15.7 million, and 13.72 million for Wii. Software sales for April to December 2010 were 98.9 million on DS and 150.5 million on Wii.

Projected hardware sales for the full financial year (ending March 31) have been lowered - the Wii by 1.5 million units to 16 million and DS by 1 million to 18.5 million units. However, when the latter is combined with projected 3DS hardware sales, Nintendo expects 22.5 million units by the end of March.

Forecasted 3DS hardware sales during its first month on sale are thus 4 million units.

Predicted software sales for the full 12 months are up - the Wii by 32 million units to 170 million, and DS by 10 million to 120 million. Again when combined with 3DS expectancies, the latter becomes 135 million - so 15 million 3DS games are expected to be sold during the handheld's first month (for most of which it will be solely available in Japan).

The 3DS launches in Japan on February 25, in Europe on March 25, and in the US on March 27.

9 Comments

Greg Wilcox
Creator, Destroy All Fanboys!

2,174 1,124 0.5
I wonder... does Nintendo (or hell, ANY of the big three) have a "Plan B" should their numbers fail to meet the next set of big, fat expectations? If the 3Ds doesn't do well, it won't be from lack of trying, Oprah handing out a room full of them (dammit, O, get some poor-ass gamers together on your show!), the usual gushing praise or a big holiday crush to grab them. If the economy just flat out sucks, I can see the news stories now... "Nintendo "surprised" 3DS Not Moving Larger Numbers, Blames "Poor Retail Environment""

or something like that... Predictions and projections ain't sales, that's for sure...

Posted:3 years ago

#1

Stephen McCarthy
Studying Games Technology

205 0 0.0
I not hopeful for the 3ds... it all remakes on day 1....

Posted:3 years ago

#2

Greg Wilcox
Creator, Destroy All Fanboys!

2,174 1,124 0.5
Well, it seems that lots of people want those remakes, as new or reworked versions of Super Mario titles seem to sell no matter how many hit stores. Nintendo has (as they've noted in the past) a wealth of game history to fall back on and the hardcore Nintendo fans will buy those games over and over on different platforms even with not too many "innovations" or significant changes to the formula.

That and the more original 3DS games will draw in enough new users out of curiosity and if the games are good enough, word of mouth and positive critical reception will keep the system going strong. Not a rabid fanboy overestimate here (hell, it's been a pain trying to get in regular contact with the company now that I'm not with a big site), just an observation from someone gaming since 1972.

Posted:3 years ago

#3

Stephen McCarthy
Studying Games Technology

205 0 0.0
I all for remakes that people want, it just it all looks like the remakes are coming out on day 1.

I can not seen one game that new.

Posted:3 years ago

#4

Moos Boulogne
Quality Assurance Manager

5 0 0.0
Greg, I'm not sure what you mean with your posts? Projected saled by companies are calculated by people who have tons of experience doing so. Of course that does not mean that a company can't have a disappointment now and then, but missing their targets won't mean going bankrupt immediately either. Every company prepares scenarios for if they targets are met, not met or exceeded.

Posted:3 years ago

#5

Jim Webb
Executive Editor/Community Director

2,266 2,403 1.1


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Thank you for posting this, Alec. I've been having to point this out for months. I've lost track of how many times (and this includes many journalists) attributed Nintendo's financial situation to poor sales when it was actually a massive $700+ million currency exchange. They would have posted $500+ million in profit that quarter without the exchange loss.

All those in the media or in an analytical position should really take note of that face prior to publishing as it greatly changes the perception of Nintendo's sales and finances.

Posted:3 years ago

#6

Tony Johns

520 12 0.0
To be honest, it is hard to get up to the proffit sales that Nintendo achieved in 07, 08 and 09.

They were really big years when Nintendo succeeded.

If anyone was to pick on Nintendo, it would be more better to compare Nintendo's proffit sales of this financial year to the proffit sales of this financial year from Sony and Microsoft and compare all 3 of them instead of looking at Nintendo's past success and try to say they have fallen in this financial year when looking at this financial year Nintendo have still been turning over a proffit.

Posted:3 years ago

#7

Shane Sweeney
Academic

365 292 0.8
Exactly, its the Regression towards the mean. Look up "regression fallacy". Back pain can flair up and only at its worst point do we seek medicine which fixes it even though the following day we might have less pain anyway. An athlete at there peak will be on Sports Illustrated and shortly after wards their career is a much lower profile, leading to the Sports Illustrated "Curse", speeding cameras are installed on roads that have peak death tolls, but shortly after wards regress to the mean.

Nintendo has a few exceptional years, they will have to regress to the mean eventually. Which in context is still quite high. Apple Stock next anyone?

Posted:3 years ago

#8

Greg Wilcox
Creator, Destroy All Fanboys!

2,174 1,124 0.5
@Moos: Some analysts these days will use any news they see as negative above to "predict" doom if a product isn't moving like it's projected to. I can think of a few recent and not so recent game releases that didn't move "as expected" that ended up shutting down studios or having companies re-adjust numbers into assorted Plan B scenarios while blaming game critics, studios or escaped zoo animals in the process. Granted, Nintendo isn't going anywhere and the 3DS isn't going to sink the company (unless people start getting Virtual Boy fever or something).

On the other hand, If it doesn't sell those projected 4m units in the first month, should Nintendo stock plummet as a result based on the fact that 4m people simply can't afford the new system? I'd say nope - just wait another half month and see the numbers eventually hit that target. Some analysts tend to not see things long term if some products fall short of expectations when they still have more than enough time to exceed them once given a chance.

Posted:3 years ago

#9

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