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Finance

Nintendo profits decline 18% over 2010

Thu 06 May 2010 8:09am GMT / 4:09am EDT / 1:09am PDT
FinancePublishing

Company's performance negatively impacted by Wii price drop and fewer software releases

Nintendo's profits dropped by 18 per cent year-on-year for fiscal 2010, according to the company's financials released today.

The company's net income for the year ending March 31, 2010 was JPY 228.6 billion (2.4 billion / 1.6 billion) - a decline of 18 per cent on last year.

Meanwhile, net sales declined by 22 per cent to JPY 1,434 billion ($15.3 billion / 10.17 billion).

Nintendo attributed the drop to the negative impact felt by a price reduction to Wii hardware, fewer strong Wii software releases over the first half of the year and appreciation of the yen.

Overseas sales accounted for 84.1 per cent of overall sales and the total number of employees increased over fiscal 2010 from 4130 to 4425.

Nintendo's forecast for fiscal 2011 was a further 2.4 per cent drop in net sales and a 12.5 per cent decline in profit.

The new Nintendo 3DS hardware - which it confirmed will be compatible with DS and DSi software - will be released during the year, as will Pokemon Black / White.

"Through the expansion of 'Nintendo Zone', a service utilising the wireless function of Nintendo DS, Nintendo will continue to provide unique content such as free downloadable Nintendo DS software and Nintendo Wi-Fi connection, which enables players to enjoy games together with their distant friends," said Nintendo.

"In addition, Nintendo's strategy is to achieve the ultimate worldwide objective of 'must-have for everyone' rather than 'must-have for every family'. Nintendo will enrich consumers' daily lives with features such as information services at cultural facilities, commercial establishments and more."

10 Comments

Chris Hayward

34 0 0.0
Given that Mario Galaxy 2, Metroid Other M, new Zelda, new Pokemon and the 3DS are set to be released in the next fiscal year, I doubt Nintendo are overly concerned with this years results in the grand scheme of things...

Posted:4 years ago

#1
Nintendo don't blame piracy this time ?

Posted:4 years ago

#2

Solomon Lee
Web-Based Games Reviewer

13 0 0.0
After Reggie appeared in an a commercial to promote the Black Wii Console and their upcoming AAA games, this news will be small potatoes to them in the long run.

Posted:4 years ago

#3

James Botterill
Product Manager

1 0 0.0
How much of this could be down to the strength of the yen in international markets?

Posted:4 years ago

#4

Jack Loftus
Contributing Editor

95 0 0.0
Caveat: This was still Nintendo's third best year on record.

Also, the key word here "profits." "Profits" declined, yes, but what are the competitors' "profits"? What are third party developers "profits" looking like right now? The industry as a whole?

Just trying to frame the issue since the deluge of "Nintendo is doomed" and "well, it looks like that Wii bubble has <em>finally</eM> burst" rhetoric is resurfacing again.

Posted:4 years ago

#5

Haven Tso
Web-based Game Reviewer

255 8 0.0
I think the Wii business is not really that sustainable. Creativity seems to have dried and also looks like they need a catch up in technology too. Don't get me wrong "Monster Hunter Tri" is a beautiful game and it's great but then there are not a lot of such titles on the Wii. Even when they have, they seem to be not on the radar much unless they are first party games. I think if all third parties can create games like Capcom and get Nintendo on board to heavily promote them, the situation will be better and people can still look pass the prematurely aging console.

Having said that DS seems to still have quite a bit of steam in it although its sales is declining too. But then it has been on the market much longer than Wii

Posted:4 years ago

#6

Tony Johns

520 12 0.0
All the more reason for Nintendo to think carefully for the next gen since that the competition has started to catch up to them with the motion control and Nintendo needs to come up with something really different, or something that can compete against the technology of the other two machines in the next few years.

Posted:4 years ago

#7

Jim Webb
Executive Editor/Community Director

2,232 2,161 1.0
Haven, the Wii was technologically dated upon release so the idea that they now need to catch up is pointless. I think you'll notice that it is Sony and MS who have been playing catch up the whole time.

Some also seem to be missing the fact that it was the first half of FY that caused the reductions in profits/revenue/sales and miss the fact that the second half had higher profits/revenue/sales than those before it. The 4th quarter that just ended was their best ever so sales are actually going back up.

I do find it amazing that after all these years that so many in our industry fail to grasp the concept of the Wii. It never will need to compete technologically with the PS3/X360 regardless of Natal or Move because the nature of both parent products is counter to the nature of the peripherals. No different than Dodge putting turbos in their Ram trucks as a means to compete against Mustangs and Corvettes.....that doesn't make the truck a sports car.

Posted:4 years ago

#8

Tom Baines
Journalists

3 0 0.0
It's interesting that a 'drop in profits' is instantly seen as a manufacturer or producer failing dismally. Everyone seems to have forgotten that there are already a hell of a lot of Wii and DS units out there, and that the mortality rates of these units are a fraction of those exhibited by the 360 and PS3. For hardware sales figures we can definitely observe this kind of 'plateau effect'.

In short, most people who want a Wii already have one, and you won't have to replace it any time soon because it won't melt through your TV cabinet and set fire to your living room (like an older generation 360...)

Posted:4 years ago

#9

Kingman Cheng
Illustrator and Animator

943 156 0.2
I'm with Toms comment however Miyamoto also admitted recently that sales going down is due to software, so they know what they need to focus on. It's not the fact that the Wii isn't HD, or got Blu-Ray etc.

Posted:4 years ago

#10

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