Close
Are you sure? Are you sure you want to report this comment? I understand, report it. Cancel

Finance

Half-year losses of ¥70 billion for Nintendo

Thu 27 Oct 2011 7:48am GMT / 3:48am EDT / 12:48am PDT
Finance

Company misses targets and loses ¥52.4 bn on exchange rates

Nintendo has announced a massive ¥70 billion loss for the sixth month period ending September 30, 2011.

The losses fall short of yesterday's predictions in the Nikkei of a recurring ¥100 billion loss, but nevertheless exceed the internally predicted loss of ¥35 billion - thanks to slowing sales of Wii and DS, and the impact of a very strong Yen compared to shrinking currencies worldwide.

In fact, the impact of those uneven currency markets was even greater than expected, accounting for ¥52.4 billion of the company's losses.

Because Japanese companies do large amounts of business in areas with shrinking economies or cheapening currencies, revenues in Yen terms from those areas are rapidly falling.

Net sales for the period were also slightly under target at ¥215.7 billion instead of the predicted ¥240 billion, whilst predictions for yearly net income have been dropped by ¥40 billion from ¥20 billion profit to a ¥20 billion loss.

Hardware sales for the 3DS for the period were 3.07 million units, with 8.13 million units of software shifted for the device. The 3DS port of The Ocarina of Time became a million seller worldwide during that period.

The DS family, excluding the 3DS, sold 2.58 million hardware units and 28.99 million software units worldwide. 3.35 million Wiis were sold worldwide, alongside 36.45 million software units.

8 Comments

Jim Webb
Executive Editor/Community Director

2,243 2,212 1.0
That's nearly $700 million in exchange losses. A further $232 million in non-exchange losses.

Without the exchange loss, they'd be posting a $500 million profit.

Posted:2 years ago

#1

Edward Buffery
Pre-production Manager

148 96 0.6
How frustrating for them!

Posted:2 years ago

#2

Brian Allen
Social Game Producer

5 0 0.0
My Bet: Less than 3 months to Mario licensing on iPhone.

Posted:2 years ago

#3

Nicholas Pantazis
Senior Editor

1,017 1,463 1.4
@ Brian Nintendo's issue has nothing to do with sales (well, not MUCH to do with sales). The 3DS is over 8 million sold worldwide, and competing for the #1 worldwide hardware spot week in and out, even with the price drop months behind them.

On the software side, over the next two months Nintendo has Mario Kart and Mario on 3DS and Zelda on Wii. Any one of those games will make more in revenue than Angry Birds has in its entire lifetime. Yes, I'm serious about that. Rovio makes tons of money, but most of their income now is from licensed toys and t-shirts, not the actual game sales. which have yielded only $200 million or so in revenue over their entire two year existence across multiple platforms and iterations.

To put it simply: Nintendo will literally make more net income on software in the next three months than Rovio as a company has on software in two years. These exchange rate losses hurt, but the mobile software industry has such a low price point that even the most successful companies aren't making as much money lifetime as successful SINGLE GAMES are on dedicated consoles. It's a low risk and low-reward environment, where you don't need much money to make games, but you also aren't going to pull away with anything like the tens billions of dollars Nintendo has made over the last 5 years. It certainly wouldn't do anything to sustain Nintendo through these exchange rate woes, and they won't waste their time on it.

Posted:2 years ago

#4

Charles Beaupré
CEO PlayNtrade

2 0 0.0
Just a thought

It's time to open a real corporation in the United States. It would have the opposite effect with the exchange rate...
keep up Nintendo !!

Posted:2 years ago

#5

Jason Young
Software Engineer

7 0 0.0
@Jimmy I'm not sure how you're doing your calculations but even without the forex losses Nintendo would have have still posted a net loss for the period, granted a much smaller one.

Posted:2 years ago

#6
@Charles: Yeah, I wonder the same thing. Although it would only really affect the reports, the "real" profit and figures would be exactly the same.

Anyway, Nintendo are definitely in a transition period now: the next qrt is critical for them, with the release of most of their "mega-sellers". WiiU coming next year, building a new headquarters in Japan, transitioning to the "HD" era ... and with Pokemon, Dragon Quest & Monster Hunter(s) all releasing next year

Posted:2 years ago

#7

Patrick Frost
QA Project Monitor

393 189 0.5
@Brian - Surely by your logic, Sony would be a mobile developer by now?
@Nicholas - Thanks for the insight.

By comparison, the original DS sales didn't get going until Mario and MarioKart came out for that system either. The real questions is, where is the new Wii Sports of Brain Training?

Posted:2 years ago

#8

Login or register to post

Take part in the GamesIndustry community

Register now