Nintendo Post Annual Loss, Expect Return To Profits This Year

By Ishaan . April 26, 2012 . 8:30am

Nintendo released their financial results for the fiscal year gone by this morning, reporting their first ever annual loss in several years. Factors blamed for the loss include the global price cut for the Nintendo 3DS and the currency exchange rate.

 

The 3DS hardware, which is currently being sold at a loss, will return to profitability by the middle of the ongoing fiscal year, which will end in March 2013, Nintendo’s statement says. Games such as New Super Mario Bros. 2 (August) the new Animal Crossing for the 3DS (fall), and a new game in the Brain Age series (summer) will all be released in Japan this year and be part of the initiative to help the company return to profitability. The upcoming Wii U home console is also on course for a global launch by the end of the year.

 

Additionally, Nintendo are also placing importance on their digital strategy going forward. The company will use their new Nintendo Network, which will be available on both 3DS and Wii U, to push multiplayer games and provide add-on content for their titles. For instance, New Super Mario Bros. 2 is confirmed to be compatible with future downloadable content, according to past statements made by company president, Satoru Iwata. Digital releases of retail games are also being prepared, although no timeframe as to when this service will be available has been provided.

 

For the fiscal year gone by, Nintendo posted a loss of 43.2 billion yen ($532.2 million), as compared to the previous fiscal year where they made a profit of 77.6 billion yen ($956 million). For the ongoing fiscal year, Nintendo estimate profits of 20 billion yen ($247.1 million).


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  • http://www.facebook.com/people/Lashawn-Williams/100002444861296 Lashawn Williams

    while it is sad that the lost money, they at least have a plan to be come proftable

    as long as the don’t mess up the wii u lanch with a odd prices or bad lanch titles they are all set

    look at them taking it in strides

  • http://twitter.com/Paradox_me Paradox me

    I’m really hoping the Nintendo Network will eventually bring actual online accounts to both the 3DS and Wii U.

    I don’t play multiplayer, but if I’m gonna do this whole digital thing then I’d prefer my content be tied to an account rather than the console itself.

    • James Beatty

      “I’m really hoping the Nintendo Network will eventually bring actual online accounts to both the 3DS and Wii U.”
      That’s what i have heard. I think That is coming with an 3DS update near november. Expect to hear more about it at e3

  • MrRobbyM

    Lucky for them they released the little device known as the 3DS. That should get them back on track.

  • andref

    Take this comment as you will but I kind of think its a bit ironic for so long Nintendo wasn’t really a go getter when it came to Online on their products but now with this loss the article makes it seem to me that online profits is something they look forward to making a profit in

  • http://twitter.com/sheleigha Shel

    …and now even Mario enters the world of DLC. Yeah, you aren’t getting to World 8 now without paying!

    • James Beatty

      I’m pretty sure that’s not how it’s going to be. I’m thinking something more like big “maps” or worlds that you can purchase later down the road. 

    • James Beatty

      I’m pretty sure that’s not how it’s going to be. I’m thinking something more like big “maps” or worlds that you can purchase later down the road. 

    • http://s1.zetaboards.com/Espada_of_Alexandria/index/ konpon568

      I remember them saying that Game-Changing DLC will be free, and that aesthetic stuff would be paid. They also said stuff about how other companies handle and define what they believe DLC is, and that they (Nintendo) won’t be imitating them.

      I think that some cartridges will have a writable block in them where DLC will be able to go in. In other words, DLC like in PC games, as opposed to Unlock Keys for content already on the disk in home entertainment console games.

      EDIT: On the other hand, I don’t know how DLC will fare in the Wii-U…

  • James Beatty

    They lost some money, but it doesn’t seem like a huge loss when compared to other big japanese companies. With the 3DS still being sold at a loss, advertisements, game development costs, hardware R&D, and the strength of the yen it seems a lot better. If all goes according to plan, i could easily see Nintendo making money again by the end of the year. 

  • SirRichard

    They’ve stumbled a bit, but if Fire Emblem’s ridiculous success is any indication the 3DS is more than ready to turn this around by itself.

    The Wii U’s a bit of a rogue element, and while they’re doing the smart thing and preparing to cover everyone (the combination of “Mario + (Insert other franchise here)” is a formidable one), they’re going to need to get every detail right to get people on board.

  • http://www.facebook.com/people/Christopher-Ruiz/100000640263916 Christopher Ruiz

    Man… Nintendo really did goof a bit back then, huh? You’d think that after all of these stories you read of #1 selling games, and how the 3DS is selling outstandingly, that they’d be making tons of money… But then you remember that they’re only selling that hardware at a fraction of the cost. Man, sucks for them. :(

    • puchinri

      Well, they are making tons of money. And their predicted losses aren’t so far from their expected losses. It’s just that the yen kind of didn’t help any of that. And by September, they’ll be recovered and making profit anyway.

    • Tee Niitris

      For those new to business, it’s not about how much you sell… it’s about profiting from what you sell.

      Considering the losses from some other groups, Nintendo will be fine.

  • Fritzroy Woods

    Honestly all i saw was “New Super mario brothers and ..support DLC” then all my worries went as fast as it came. How much money do you want Nintendo 5.99? 9.99 ill give you 14.99 for an extra 20-30 challenging levels.

  • konsama

    I insist, if 3DS games weren’t region locked imagine how much units would have moved since monster hunter 3g was released. 

    At least if they keep getting this good third party support and selling this well they’ll recover decently.

    • Barrylocke89

      I honestly don’t think Monster hunter 3g would have moved that many more copies with a lack of region lock. Yes many people that read this blog import (it IS a newsblog that mostly focuses on Japanese games) but that doesn’t represent the whole of 3DS owners. The biggest losers when it comes to region locking are probably European gamers importing from America, though the reverse also proves true with some of these sorts of games.

      • SeventhEvening

        Or people like me. My primary language is English, but I live in Korea. Either I can get an Asian or Japanese system and I’m stuck playing games in Korean or Japanese (mostly Japanese, many first party games get released in Korean, but third party usually doesn’t bother), which are both languages I know, but I’m not a speedy reader, so playing games in those languages requires a lot of effort.

        My other option is to import an American console, but then I have to import every single game that I want to play, even though there are Japanese games all around me. The 3DS doesn’t have a ton of games I want to play, but it is starting to build momentum. But not enough momentum for me to go through the hassle of importing the console and every game, nor are there any titles I need to play so bad I’m willing to spend all my free time translating them.

        • Barrylocke89

          Yeah, that’s a good point as well. In your case, if there was a lack of region lock, you could locally purchase some games (say a game that isn’t text heavy like Mario, or a text heavy game that hasn’t come to the West, like Beyond the Labyrinth) and then import other games that are text heavy and made it to the Western regions, like Tales of the Abyss.

          Out of curiosity, in your experience, do a lot of Korean gamers play games from NTSC-J? Or do they mostly just play games that get released in Korea?

          • SeventhEvening

            Well, in all honesty, I don’t know many Korean gamers, but there more or less isn’t a difference between NTSC-J and “Asian region”. On the PS3, 360, and PSP, anything released in Japan ends up in Korea too. Except the price is way lower (usually about 55 dollars) and the cover is usually in Korean. The game inside is usually the same: Japanese. There are strange exceptions. First party Nintendo titles get localized a lot, and for some unknown reason, Final Fantasy XIII has Japanese voices but English text. I think if a game appeals enough to Koreans, they’re willing to play it with Japanese text. Classic example is One Piece: Kaizoku Musou. It isn’t localized, it just has a cover with Korean text. But One Piece is wildly, wildly popular here (honestly, maybe more so than Japan), so it seems to be selling well here. I bought a copy a few weeks ago.

  • puchinri

    I remember looking over the data and everything last night. That isn’t so bad. And it’s good that they’ll recover by later this year.

    A lot of stuff factors into the profit they made last year compared to losses this year. It doesn’t look that bad to me. Then again, what do I know. ^u^;

  • Göran Isacson

    Gotta admit that I did a double-take when I saw them going from 77 billion profit to a 43 billion loss. Is that development/advertizing costs of the 3DS biting them in the ass (combined with the costs of developing the Wii U)? Does every company in the hard-ware console business tank this much when they’re working on new consoles, or is Nintendo just really unlucky right about now?

    • WizardoftheBlueOrder

       Perfect storm of losses, from what I can see. The Wii and DS have been “obsoleted”, so in addition to decreased interest, there is also a consumer base that is instead going to wait to pick up the updated devices. So there’s minimal income from there.

      The 3DS, while having some very good selling software, had a weak launch year and the price cut meant that they are taking a hit on every unit. So there’s weak income from there.

      Add in R&D, advertising, and other costs, and Nintendo’s in the red.

      Regarding every company in the console business tanking this much: Keep in mind that the only other two companies still in the business are not exclusively in the console business. They can soak a loss in the game market and instead focus on alternative profitable markets. (Though Sony…is worrying.)

      However, keep in mind that since…the Saturn, I believe, have consoles been selling at a loss with the expectation that software sales and licenses will make up for the losses. (Though this is a rare move by Nintendo, I suppose it shouldn’t be surprising.)

      And yes, the terrible conversion rate did not help in the slightest.

  • SeventhEvening

    Last year was a pretty weak year for Nintendo on the release side. I think they announced the Wii U too quickly. They announced it and geared up for it’s release and then the releases for the Wii kind of dried up even though the Wii U was about a year away. At the same time, the 3DS released with a weak launch line-up (which is pretty common), so the DS releases started drying up, but the 3DS didn’t have any momentum yet. Then Nintendo dropped the price of the 3DS to boost sales, also alienating early adopters.

    I expected them to have annual losses. They’re usually very on the ball, but they didn’t do anything right over the last year. They didn’t really do anything that could generate any profit. I think Sony will suffer losses, as well, but they may have managed to offset the losses from the vita with sales from titles like Uncharted 3. 

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