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Nintendo expecting first ever annual losses by end of fiscal 2011

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

(Source: Gamasutra)

Topics

Nintendo

19 comments

  • Pruman - October 28, 2011 8:20 a.m.

    I blame a number factors for this, in descending order of severity: #1) The lack of a strong launch title and lineup. None of the games use the hardware in a way that makes me want to run out and buy one, and to add insult to injury, the most-hyped games are the ones I played 15 years ago when they had "64" tacked on to the end of them, and which I already have sitting on my game shelf and on my Wii's hard drive. WHERE'S THE KILLER APP?!?! #2) Mobile gaming, particularly on iOS devices, is at a point where it can effectively replace a dedicated portable console. I personally skipped the 3DS, despite being intrigued by it, because I have an iPad and iPhone which give me my gaming fix, and if they can't, well, I can always reach for my DS Lite or hacked PSP. #3) For the past two portable generations, Nintendo has refreshed its hardware about once every 18 months, and the first one is always done in a way that makes the launch model look like a sick joke played on early adopters. When reports about the system's awful battery and finicky 3D started coming out, that told gamers that they were better off waiting for the next model. #4) Asking $250 for something that only plays games in 3D (I'm assuming most people who want the 3DS have DS's already), and not even that well at that, is a hard sell during a global economic depression. For $50 less, you can get an iPhone 4S, which can do a lot more than just play 3D games. For $50 more, you could get a PS3 or an XBOX/Kinect bundle, both of which have a lot more features and games than a 3DS. I'm sure I'm missing something, but to me those are the big ones. It's sad because I love Nintendo, but it feels like they're not even trying to compete here.
  • Burdmayn - October 28, 2011 5:39 a.m.

    With the PSVita on the horizon, I'm actually thinking about selling my 3DS. I know it has a decent library of games now but there's nothing compelling me to play them. The game I wanted most (Monster Hunter) isn't confirmed for a US release. I'll have to think about it more, but Nintendo isn't making a very strong argument as to why I should keep the console right now. I currently use my PORTABLE system about as much as my Wii...
  • Cyberninja - October 27, 2011 4:41 p.m.

    honestly content with my 3ds because i have doad and smtdso to play on it, netflix to watch random stuff and a 3d camera(video camera in a few weeks). also in the case of wii it has a good amount of games to play but everyone ingores all the non-nintendo ones .
  • brickman409 - October 27, 2011 4:24 p.m.

    how many times do we have to say this nintendo? MAKE A PIKMIN EFFFING 3 ALREADY!!!
  • BladedFalcon - October 27, 2011 2:59 p.m.

    What the f*ck did anyone expect? Nintendo failed to release any new, noteworthy game for most of the year. As of now, 7+ months in of the 3DS's release, there is not a single, original (read: Not a remake, so no star fox or OoT.) game taht justifies buying the console at all. it's as if Nintendo had forgot the main basic function of a videogame console: TO PLAY F*CKING GAMES And while I will acknowledge the Wii has had a fair share of nice exclusive games in the past years, this year has been attrocious for the console, with only this the latest kirby game and the upcoming Skyward Sword to justify being "current" for this year, so again, who's surprised that sales have come down? What pisses me off about this though. is that once those mentioned Mario and Zelda games come out, all the nintendo fanboys will once again gonna droolingly lap it all up. And keep nintendo from falling hard and truly learning from their mistakes. they've been riding on mediocrity for years and without a strong third party support for far too long.
  • darron13 - October 27, 2011 2:20 p.m.

    This is what happens when, aside from one Zelda game, support for the Wii is pretty much dropped and when you release a handheld that even now, hardly has any games worth buying.
  • stitchjones - October 27, 2011 1:29 p.m.

    Not surprising given the lack luster quality of the 3DS and it's currently library of games and N64 re-hashes. Plus the fanbase for the Wii really went away well over a year ago. Every low level game developer produces tons of shovelware titles for the Wii nearly every month.
  • shawksta - October 27, 2011 1:27 p.m.

    Guys, please, no time to say utter garbage, as far as the Wii's concerned, it has more than enough solid games for the "Core", they are doing pretty well all by themselves, mainstream 3rd Party is their weakness (Which is what I have a 360 for) and something Sony and Microsoft depend too much on.
  • shawksta - October 27, 2011 1:23 p.m.

    Thats bad but really the 3DS had a weak launch. 2012 will be better with more 3DS games, but for now, Fortune smiles as hopefully Super Mario 3D Land, Mario Kart 7, Skyward Sword and the christmas bundles will get them on track, with the games themselves being awesome, and Nintendo's progress on Multiplayer getting better with Mario Kart 7's awesome online community, they'll be great.
  • Redeater - October 27, 2011 11:24 a.m.

    I'm a Nintendo fanboy at heart but I don't understand how people can defend their decisions as of late. My wii is sitting next to my 360 and guess what is sitting on top of it? Rage, Arkham City, Gears 3....and about 4-5 months of dust.
  • Redeater - October 27, 2011 11:19 a.m.

    And here I thought the 2 AAA games being released this year was going to make them record profits..... oh wait.
  • codystovall - October 27, 2011 11:19 a.m.

    The only thing that disappoints me about the 3ds is they expected us to buy them like hotcakes when they shipped as fast as they could at high price and without interesting games. But the 6 years of wii and crappy wii games is unforgiveable and may or may not be fixed with the "wii U".
  • nanjingrad - October 27, 2011 10:58 a.m.

    This is what happens when your main platform is a gimmick with s**t shovelware and no core audience support. Grannies and dips**t's dont support a platform.
  • Redeater - October 27, 2011 11:20 a.m.

    +1000000 to you sir. That should be their new mantra.
  • Ultimadrago - October 27, 2011 10:41 a.m.

    Thank the 3DS for this, Nintendo. You done goofed.
  • ChrisCultista - October 27, 2011 10:39 a.m.

    Dun forgot the hardcore eh Nintendo?
  • Ravenbom - October 27, 2011 10:32 a.m.

    Well maybe if Nintendo was pushing games instead of hardware, maybe they'd be in the black instead of the red.
  • ChrisCultista - October 27, 2011 10:43 a.m.

    That's a good point. What is Nintendo now? It isn't a software company anymore, and it doesn't have enough hardware to be called a true hardware company either. What is Nintendo?
  • therawski - October 27, 2011 1:53 p.m.

    Nintendo is a failing toy company.

Showing 1-19 of 19 comments

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