Nintendo is on track to report its
first ever annual loss come the end of its 2011 fiscal year.
Today, the company told press it expected to post losses of 20 billion yen
($264 million) by March 2012, marking a unenviable first for the
company since it began releasing its numbers back in 1981.
Earlier this year, Nintendo forecasted a profit of 20 billion yen. However, today it revised its
predictions based on weakening console and software sales, and a
“stronger-than-expected yen appreciation” in the first half of
its 2011 fiscal reporting period, which ended on September 30th.
During this six month stretch, the company said it sold 3.07 million
Nintendo 3DS handhelds, 3.35 million Nintendo Wii units, and a
lower-than-expected 36.45 million in Wii software sales—the latter of
which was pinned to a lack of major releases and new games.
To put the new numbers in perspective,
Nintendo said it is now expecting its 2011 sales to reach 790 billion
yen ($10.4 billion) - a noticeable drop from last year's sales of 1.01
trillion yen ($13.3 billion).
As anticipated in an earlier story by
Japanese news outlet Nikkei, Nintendo reported its half-year pre tax
losses had hit 100 billion yen ($1.3 billion dollars), exceeding its
original estimation of 55 billion yen ($725.6 million). A large part
of that decline is being attributed to exchange losses driven by a
strong yen mixing with other less-than-stellar economies.
Specifically, Nintendo says this factor alone amounted to a half year
loss of 52.4 billion yen ($691.6 million).
The main takeaway here is Nintendo
appears to have been hit hard by the one-two punch of an unfavorable
economy and a downturn in sales. As to the latter, as we mentioned
yesterday Nintendo always has a way of bouncing back with a new Mario
or Zelda game - and wouldn't you know, there are a few of those
coming down the pipe just in time for the gift giving season. What's
more, although the Wii U won't likely be out until its next fiscal
year, that too will likely have a great impact on Nintendo's
fortunes - potentially for the better.
Oct 27, 2011