Nintendo misses annual profit and hardware sales targets

Nintendo fell short of its annual profit and hardware sales targets during the business year ended March 31, 2013. The company reported net profit of 7.1 billion yen (£46.8m / $71.4m), just over half of what it forecast in January, although the figure represented a major improvement on the net loss of 43.2 billion yen (£285m / $434m) posted a year earlier.

Net sales were down 1.9 per cent year-over-year to 635.4 billion yen (£4.2b / $6.4b), while the company reported an operating loss of 36.4 billion yen (£240.3m / $366.2m). The operating loss was greater than the 20 billion yen forecast in January and roughly in line with the previous year's results.

The disappointing figures were largely due to “weaker than expected” Wii U and 3DS sales, with the decision to sell the home console at a loss also playing a key role. Wii U sold just 450,000 units during the three months ended March 31, taking lifetime sales to 3.45 million. This fell short of the company’s January guidance of four million sales, which itself was downwardly revised from an initial target of 5.5 million. Wii software sales totalled 13.42 million units, missing the 16 million forecast in January.

3DS hardware sales came in at 13.95 million units, short of Nintendo’s 15 million target, while the company missed its 3DS software sales forecast of 50 million units by 390,000. Lifetime 3DS sales now total 31.09 million units, with 3DS software sales at 95.03 million.

Nintendo said it expects to report much improved results for the current business year ending March 31, 2014, It forecast net sales of 920 billion yen (£6.1b / $9.2b), operating income of 100 billion yen (£660m / $1b) and net profit of 55 billion yen (£362m / $553m). The company aims to sell nine million Wii U hardware units and 38 million Wii U games this financial year, as well as 18 million 3DS units and 80 million games for the portable.

Additionally, Nintendo has announced an executive reshuffle that will see global president Satoru Iwata take on the additional role of Nintendo of America CEO. Subject to shareholder approval, current NOA CEO Tatsumi Kimishima will become managing director of the Japanese parent company this summer, taking on the duties of two departing executives. Nintendo said Iwata will assume many of Kimishima's current responsibilities in a move that will "support the company's unified global strategy, allow streamlined decision making and enhance Nintendo's organisational agility in the current competitive environment". Reggie Fils-Aime will retain his role as NOA president and COO, reporting to Iwata.