Nintendo cuts sales targets for Wii U, 3DS consoles
Company sells 3 million Wii U consoles to December 31, 11 million games for new system
Nintendo has cut forecasts for its consoles, expecting to sell 4 million Wii U units by the end of March - down from a prediction of 5.5 million units.
It also said it projected 3DS sales to hit 15 million rather than 17.5 million and dropped DS expectations from 2.5 million to 2.3 million.
"Wii U hardware sales have a negative impact on Nintendo's profits"
Nintendo statement
The company has raised its full-year profits expectations to ¥14 billion ($153.8m / £97.6m) following the launch of the Wii U console. The system sold just over 3 million units from November to the end of December.
That's up from the ¥6 billion it predicted back in October following slow sales of the 3DS handheld.
For the nine months ended December 31, the company recorded net profits of ¥14.5 billion ($159m / £101m) compared to a loss of ¥48 billion the previous year, with sales of ¥543 billion ($5.9bn / £3.7bn). Nintendo noted that "owing to the fact that the Wii U hardware sales have a negative impact on Nintendo's profits, the operating loss was ¥5.8 billion."
The Wii U has sold 3.06 million units since launching in November and December last year, with 11.69 million game sales for the system.
New Super Mario Bros U had sold 2.01 million units and Nintendo Land 2.33 million.
The original Wii is still outselling the Wii U, with 3.53 million hardware sales and 45.08 million software sales.
During the nine months Nintendo sold 12.71 million 3DS consoles and 39.56 million games for the systems. The company noted success with the 3DS console cut in to sales of the regular DS, with only 2.15 million sales of hardware and 30.24 games.
Software unit sales to the end of December 31.
- New Super Mario Bros. U (Wii U) - 2.01 million
- Nintendo Land (Wii U) - 2.33 million
- Pokemon Black Version 2/ Pokemon White Version 2 (DS) - 7.63 million
- New Super Mario Bros. 2 (3DS) - 5.96 million
- Animal Crossing: New Leaf (3DS) - 2.73 million
- Super Mario 3D Land (3DS) - 12.71 million
Gaming worldwide has undergone a seismic paradigm shift and there are winners, like Steam, and losers like THQ.
I was expecting this, given the delay in their lineup for the WiiU. Seems they are content to ride this bump out, and at least they are back to profitability (and at least the profit predicted got bumped up).
1m WiiU sales for the next 3 months may be an intentional underestimation as well?? (probably closer to 1.5m?).
Also, the WiiU attach rate is pretty reasonable (close to 4). Any report as to whether this includes digital sales?
But I do agree with Bruce, in that its certainly a tough market. Lets see how the next year pans out...
It's to be expected, really. Expecting Wii U to track within 5% of Wii's shipments was quite stupid at worst, and blind optimism at best. Higher price, more difficult advertising campaign, low consumer demand because of the economic climate, no "Wii Sports", and no blockbuster game as big as Zelda. Combined with a complete lack of releases in January and February, expecting to be able to ship 5.5 million Wii U units was a tall order. Really, they should have set more realistic expectations from the start.
"The original Wii is still outselling the Wii U, with 3.53 million hardware sales and 45.08 million software sales."
Still? This is the first official shipment report we've had with numbers for both systems. ;-) But more importantly, this:
"Mario Kart 7 (3DS) - 39.56 million"
cannot be right!! I'm sure Nintendo would be over the moon if they'd managed to sell more than 1 copy of Mario Kart to quite a few 3DS consumers.
The lower 3DS estimation has to be down to the Western sales, Japanese sales have been through the roof for twelve months. Then again, there is still no consistent stream of software in the West, whereas Japan gets quality new titles every month. It's only natural Western sales would lack behind, because as we all know, software sells systems. Japan also had a huge year end hit in Animal Crossing. If Nintendo wanted to shift those extra two million units globally, they should have had a global Animal Crossing release in November. Paper Mario just doesn't cut it as a system selling blockbuster, while portable Animal Crossing clearly does.
However, despite the mistakes, it's important to note that Nintendo have raised their profit expectations, in fact, they've doubled them. I don't doubt their renewed digital push, particularly the 500k digital sales of Animal Crossing, have really assisted there. It gives a clear sign of the strength of Nintendo's core business, as Rob Fahey argued months ago; that core strength, the ability to profit despite tough competition, has been lost against a ridiculously strong yen over the last 18 months to two years. A weaker, more stable yen, means Nintendo have their key strength back, and it's that strength that's kept them in the market, able to evolve and even revolutionise themselves when they need too.
It'd be tempting, and I don't doubt this will be the case across the net, to write Nintendo off now. Wii U is their Saturn, dedicated handhelds are dead, etc etc. But like I've pointed out above, Nintendo have their major strength back, the major strength that really underlines the stability and power of their core business: they're turning a profit despite lower than expected sales of ALL their devices, and despite launching a loss-leading system. Has any console manufacturer ever managed that?
That's not to say Nintendo don't face severe challenges ahead. They need to continue their digital push. They need a more focussed, centralised approach to their online services. They genuinely need to consider if there's a place for the Wii U basic model on the market right now. They need to make sure that if Western releases for the 3DS are thin on the ground, that quality titles from Japan come swiftly to fill out the system's catalogue, either digitally or at retail. Finally, they need to make sure their next financial year--during which they will be free from assigning resources to hardware launches, which have clearly occupied them for the last two years--is all about the software.
There are already signs that's the case. The Nintendo Direct last week for Wii U, confirming things we knew (Mario's coming at E3), things we may have suspected (a Zelda remake, a new Xeno RPG), and things we didn't have a clue about, a Fire Emblem cross-over. Pokemon is releasing globally on 3DS this year, and Animal Crossing will hit the West: if there are any exclusive titles that can shift ten million copies this year, it's those two, and expect a few million systems to be sold with them. Nintendo, however, need to fill out their software release schedule, and ensure the inconsistency that has plagued 3DS, and that plagued the back half of the Wii's life disappears; if they do that, then Wii U and 3DS sales will build momentum quite nicely. With a weaker yen, with two hardware bases building, a stream of big releases, and a higher proportion of digital sales, Nintendo's transitional period will soon come to an end, and their ability to post "Nintendo-like" profits may well return.
So to return to my original point, I don't think there are any signs of the death of the House of Mario just yet. Mario sells millions of games and systems. Zelda is coming again this year. Pokemon is being revamped and released globally. Smaller franchises like Pikmin and Fire Emblem and newer additions to Nintendo's fold like Xeno are coming along. However, are we seeing the death of the House of Mii? Sequels to Wii series titles will help, sure, but are they going to sell twenty, thirty million copies again? Have Nintendo effectively communicated Miiverse to a wider audience? Have they launched the basic model twelve months too soon? Do Nintendo have another piece of mass-market revolutionary software to launch with?
It's easy to argue that the 'casual' market abandoned Nintendo, but it's obvious to me, that Nintendo stopped supporting that market three years ago, to focus on a dedicated minority. Where is the next Wii Sports? I don't mean Wii Sports U, but something with a wide appeal, a fresh idea, and a mass-market price point. Nintendo's focus--launching a 'basic' console without a family pack in for a relatively high price, launching Nintendogs 2 with a £200 console for £40 a pop--has been all at sea when it comes to the expanded audience. There is no surprise that that audience have moved onto devices that provide them with content they need. I don't believe that audience are gone for good--but I do believe Nintendo are running out of time to win back some of that audience, which is bigger than ever. If Nintendo don't manage to sell their systems to that audience again, then the House of Mii may collapse, and the House of Mario will need another revolution.
Edited 1 times. Last edit by Daniel Hughes on 30th January 2013 10:07am
It's also worth noting that the Yen has dropped significantly against the dollar and euro recently, which should help Japanese companies like Nintendo with overseas profits, and give them more room for manoeuvre on pricing where needed.
So they had a large stash of money invested in dollars or something?
I don't really know what to make of it, or what the market will make of it.
- Nintendo drops ball on handheld scene and 3D dead end
- Nintendo looking to new business model which takes longer to implement
- Nintendo working on new distribution model which takes longer to implement
Simplistic view, but saves on the typing.
No its all for Sony and MS to lose at E3 - Nintendo has made their bed, and are happy to lay in it for the time being, with a 'reasonable' revenue stream, the question is can Sony and MS make the same kind of move or are they behoove to a broken console model that could pull them down, while the SteamBox nicks all the hype?
Is that sold in, or sold through? If they're not saying, it'll be the former and since there is stock literally everywhere, the picture might be even bleaker than it appears.
3DS LL – 48,226
3DS – 26,898
PS3 – 18,322
Wii U – 13,746
PSP – 12,897
Vita – 9,748
Wii – 2,093
Xbox 360 – 611
It's sold to retailers, so while Nintendo do have money from those sales, as you say, it could be that Wii U sell-through is quite low. Eurogamer estimated 2 million sell through, and IGN 2.5 million, based on sales reports from around the globe so far. I'd guess somewhere between those figures is reasonable.
It's telling Nintendo only plan to ship another million units across January, February and March--retailers can't be forced to buy stock, so there must be plenty of stock on shelves and relatively low demand right now. It's not surprising, though, between the high price of hardware and games, poor marketing message and lack of new software. They really need to start dating some spring/summer releases and examining whether or not the basic model is actually necessary.
In a more reasonable assessment, genuinely disappointing stuff for Nintendo. I'm sure the recent glut of announced core games in that Nintendo Direct will help out in the long-term, but short term they face a persistent problem of lack of original software. No system sells without software to back it up, and the Wii U currently lacks a stand-out title for either the core or casual audiences.
I imagine it will need a $50 price cut to get it in that impulse buy range as well, but it shouldn't have much to fear from the upcoming $500 Sony and Microsoft consoles in the price war either. I also wouldn't be surprised to see $70 games from those platforms. Either way, Nintendo has as much to prove at E3 this year as its competitors, and until better software comes out, the Wii U is an unlikely buy for any but the most ardent of fans.
PS: Anyone remember that utter nonsense reported a month ago that claimed the Wii U had a software attach rate of 1.2? Looks quite a bit closer to 4 to me, which is what Nintendo predicted it would be.
Edited 1 times. Last edit by Nicholas Pantazis on 30th January 2013 1:47pm
Nicholas, people will respond differently to these figures. There's no objective reaction. Personally, there's no doubt these figures are disappointing, because for something like the ninth quarter in a row, Nintendo have revised most of their sales estimations down. There are clear problems and challenges the company faces if it cannot judge demand for its products, or generate the desired level of demand for its products. Whatever the historically slow adoption rate of consoles is, the fact Nintendo are continually failing to either judge demand for their products, or generate enough demand for their products, is alarming, and yes, bleak. These figures in themselves, as you say, aren't bad, but the broader picture shows that Nintendo have serious work to do. They either need to revise their expectations on a fundamental level, or they need to seriously alter how they aim to achieve those expectations.
Like you say, they have a lot to prove in the next financial year, but I think they're on firmer ground than any people will assume based off of this. Hardware launches are out the way, second and third generation software for both new systems are coming, their biggest franchises will hit in the next financial year, the weaker yen means Nintendo finally have some flexibility on price, and Nintendo are returning to net profit this financial year, and returning to operational profit next financial year. That shouldn't disguise the clear and strong challenges Nintendo faces, and against that context this is a bleak moment for the firm, but not one of existential crisis.
Nintendo generates cash with the wii u and is by fare the most solvent player in the console market.
Like the last 3 generations of nintendos home consoles the 3 party companys are the real problem.
Nintendo must encourage the 3 party players to take the risk and step on to the Wii U to make own memorize Ip's. The only big players that has the courage to do this every Nintendo generation is Ubisoft and it pays out for them.
Moste times it feels like the other companys just fear the strength of Nintendos Ip's.
If you do a 3 person shooter you have to compare yourself with metroid and if you want a jump and run you have to compare with Mario if you do a 3 person adventure you have to compare with Zelda. If Nintendo can change that view for 3 party companys the Wii U will be a success.
I agree. The next gen consoles will be probably be priced at around $400 to $500 here in the States so I can't see consumers rushing off to buy them in droves at that price regardless of the graphical upgrades. Publishers are already hedging their bets on the next gen. I've heard many rumblings that several of the big AAA Fall releases are going to go on both current gen and next gen systems including Call of Duty, Assassins Creed, Dragon Age III, Battlefield 4, and Watch Dogs. That won't help move next gen systems even if the graphical difference is striking and it probably won't be for the launch lineup.
Edited 1 times. Last edit by Tom Tapper on 30th January 2013 3:35pm
I would venture that while Nintendo sales are showing lag, so are new video card and sound card sales. This is a more valid comparison - if you must bring the Console vs non-console war into this discussion.
Consoles at the end are for the general consumer (not the specialized niche of PC gamers) and they are rightly targeted so. Since general consumers have less real disposable income than the 20 something year old nerd who lives in their mother's basement, consoles are highly affected by their spending and saving tendencies, in addition to the consumer sentiments.
Once (or if) the economies turn around, demand for consoles will rebound, and probably just in time for a price decrease.
Just my 2 cents.
Wii-U isn't quite the product I want it to be yet I still find it hard to see it failing like the Dreamcast. Nintendo are a lot stronger in terms of both their finances and their IP (IP where their 3rd, 4th or 5th title is arguably stronger than SEGA's top).
Dreamcast's parent just didn't have the legs to keep the system going unfortunately and made some really shocking investments given their already uncertain position.
For what its worth, Nintendo also have a highly successful previous generation console and a highly successful hand-held, which SEGA lacked too. So at this stage I'm not convinced.
Now if it became their Dreamcast in terms of awesome games... :-)
Edited 1 times. Last edit by Adam Campbell on 30th January 2013 4:14pm
Or, just spitballing here Dan, you don't like Nintendo, and would like to see them out of the console business. After all, what's better for the industry than less competition?
You seem to be involved in some kind of argument I'm not currently having with you.
I don't know how you've derived any of that from anything I've said. First I made a factual comment about the difference between sold in and sold through, then I politely thanked Daniel for digging up the correct figures for me, then I agreed that a comment Bruce made may hold some water come the future.
And that's it. Any aspersions you care to make beyond that are your own affair.
Nintendo's WiiU launch in the US sold more hardware than the X360 or PS3 launch did, nearly more than those two launches added together. THIS in a market that everyone has stated is much MUCH more difficult (dying?).
In a harder marketplace Nintendo is selling more than their rivals did last time around.
What is the consensus analysis of that?
That Nintendo is doomed. They are SEGA all over again.
Honestly, that analysis is unreasonable given the facts. It's biased to the point of being totally myopic.
Clearly Nintendo isn't where they want to be, but let's call a spade a spade. Nintendo is fighting through a tough market and at worst staying afloat and at best is doing better than it's rivals were at this point last time around. In Japan Nintendo is doing well, but they are having trouble being more US centric with their current hardware, which is concerning long-term (honestly not making a dual-analog 3DSXL shows a lack of understanding of the US market and a huge missed opportunity).
There are positives and negatives to be seen in Nintendo's numbers. No matter how you look at them, they aren't the PSVita or Dreamcast numbers by any stretch of the very biased imagination (how can you simultaneously be better than the X360 and worse than the Dreamcast?). Nintendo has a long ways to go to be where they want to be for sure, but news of their death has been greatly exaggerated.
Edited 2 times. Last edit by Art C. Jones on 30th January 2013 5:25pm
I can't say I care too much about Nintendo as a hardware company as I don't see much fun in their peripherals, as do many - even hardcore Nintendo fans - in my surroundings. I care about them for their great games, which surely aren't going away anytime soon. But the hardware? I have my doubts too. Granted, I didn't have high hopes for the Wii either so my predictions don't carry much weight, but can they pull the same stunt twice? I know many people who's Wii has been covered in dust for ages and aren't planning on buying a WiiU anytime soon, and I don't think the WiiFit moms feel much need to upgrade.
Anyway, even if the WiiU will be Nintendo's Dreamcast, the outcome won't be the death of Nintendo, but we're talking hardware here. I'd say not getting too emotional is the best way to factually discuss Nintendo's future. Noone is anti-Nintendo, just not everyone is as big of a fan as you. Don't worry though, there are plenty around, even on GamesIndustry.biz. ;)
Edited 1 times. Last edit by Laurens Bruins on 30th January 2013 6:00pm
I'm irritated because Dan has become the Bruce of Nintendo. While Bruce regularly espouses the death of all console gaming, Dan regularly espouses the death of Nintendo console gaming.
All I asked of you, Dan, was your reasoning that "Bruce may be correct." I don't think it's much to ask for people to give justifications for their positions on a site like this. That's what makes GamesIndustry different from a site like GameStop. You shouldn't come in with an 'I think they'll die" opinion and be unwilling to discuss or elaborate on your position. That, to me, is standard forum baiting, and has no place here.
Edited 1 times. Last edit by Nicholas Pantazis on 30th January 2013 6:19pm
Edited 2 times. Last edit by Dan Howdle on 30th January 2013 8:59pm
Not suggesting they are intentionally losing sales but maybe they aren't stressed about this at all. It's a shortfall of around 1m units after all.
Edited 1 times. Last edit by Michael Shamgar on 30th January 2013 10:18pm
Before discontinued in late 2001, the Dreamcast sold about 10 millions in its two year period on the market, so far the WiiU is selling slightly better than that.