Nintendo Cut Profit Forecast Owing To Weaker Nintendo 3DS Sales

By Ishaan . October 24, 2012 . 9:30am

Nintendo shared their earnings report for the first half of the ongoing fiscal year this morning, along with the announcement that they are slashing their profit forecast for the year by more than half.

 

Initially, Nintendo expected to make 20 billion yen ($250.5 million) in profits by March 31st, 2013. That number has been revised down to just 6 billion yen ($75.1 million).

 

Reasons cited for the slash in profits include the currency exchange rate, to which losses totalling 23.2 billion yen ($290.6 million) can be attributed, and weaker than expected sales of the Nintendo 3DS in territories outside Japan.

 

Nintendo initially expected to sell 18.5 million Nintendo 3DS systems by March 31st, 2013. That number has been revised to 17.5 million. The total number of Nintendo 3DS systems sold worldwide to date stands at 22.19 million units.

 

For the first half of the financial year, Nintendo recorded a larger loss than it anticipated. Going forward, the company will be looking to the upcoming Wii U console to help them turn a profit by the end of the financial year.


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  • Brimfyre

    Damn.  I want to support Nintendo in this bleak time, but I just can’t justify a Wii U until they release Metroid or Zelda.

    • puchinri

      I guess that’d just be a question of when. On that note, I do wonder what they’re intending to release and what they’re working on. I’m hoping F-Zero’s appearance in Nintendo Land means they have some kind of plans for it.

  • http://altsune.com/ Ovada Bey

    Zelda-U. Sales would go back up. 

    They have nothing to fear. 

    • http://www.siliconera.com/ Ishaan

      Zelda-U will also cost more money to develop than any Zelda game has in the past.

      • Tom_Phoenix

        Not to mention the Zelda series has experienced a serious decline since Ocarina of Time. 

        One thing is for certain. In it’s current state, Zelda isn’t going to be selling any systems.

        • http://www.siliconera.com/ Ishaan

          Yeah, I feel like Zelda’s appeal has seen its fair share of ups an downs these last few years. That team really needs to sort themselves out…

  • puchinri

    That’s most unfortunate. I really see how the exchange rate can be hurting them right now too; it’s pretty strong/severe. 

    I hope they do well and can get the turn-over they need. I expect the Wii U will do well (especially going by how it looks now), and I hope it does better than any of us expects.

  • Mrgrgr and Unacceptable World

    Considering this year, lots of Nintendo resources went to Wii U, i am quite sure that this is going to happen.

    If the upcoming Wii U do well, i feel that the deficit will get off set easily.^_^

  • Domii

    There’s a simple solution if they wan’t to improve 3DS sales in the west, LOCALIZE more games dammit!!! The WiiU will sell gangbusters by the end of their fiscal year by the way. How I know this? Mario is the answer.  

  • malek86

    This will probably be a transitional generation for Nintendo, which means they’ll face some tougher times than usual.

    Now, the DS eventually exploded in sales. There were times when it would sell 700-800k units on non-holiday months in the USA. The 3DS is matching the DS’s sales for now, but can it reach the same explosion? Probably not, as the market isn’t favourable enough, and they have already released some of their big hitters (Mario Kart, 2D Mario, 3D Mario).

    For the next generation, I’m really not expecting to see a dedicated handheld anymore. Probably something more multifunction. And with more integration with social services. I think the 3DS would gain a few sales if their games had integration to stuff like Twitter and Facebook, like for smartphone games. For an example, how comes on Android I can take a screenshot of any game, at any moment, and then share it on Twitter with a click… while on 3DS I can’t do anything of the sort?

    • ronin4life

      I think the opposite actually; the Home Console will become smaller and more multifaceted, and become the new handheld. I mean, everything is condensing more and more, and an important part of this would be portability.

      • malek86

        Mmh, so you think Nintendo will stop having two separated devices, and will just have one single portable device that can be connected to the TV as well?

        That is a possibility, but I think consoles are here to stay for yet another while.

  • ronin4life

    They slash sales estimate by 1mil, but earnings by 14BIL.?

    That doesn’t sound like the 3ds’s fault… even though it is doing poorly outside Japan. Although… why the help did they expect it to sell better(that is to say, as good as their previous forecast) outside Japan with so few games? -_-;;

    • malek86

      It could be due to weaker software sales than expected. I imagine that, with slashing hardware sales estimates, software sales estimates will also suffer.

      • ronin4life

        Oh. That makes sense.

        You know what else would have solved that problem? MORE GAMES.
        lol… I mean, Animal Crossing and Luigis mansion can’t be that far off that they absolutely needed to be release next year…@.@;

        • Ferofax

          More localizations, and faster too. The 3DS already has lots of great games, it’s just that the others are mostly in Japan right now.

          • ronin4life

            Yeah… There are a lot of games I have held back on importing because I really feel they will come over… eventually. Monhun and Animal crossing are a few exceptions, as I don’t mind buying them twice…^,^;;(my Japanese 3Ds is just a monhun/wahoo demo machine at the moment…)

            I’m also really excited about Fantasy Life, and may decide to import that too… so many great games.

  • http://profile.yahoo.com/GFQYYWFUR2SBFLKIITVECS5NAI Erik

    *cocks head* Am I reading this right?
    “Nintendo initially expected to sell 18.5 million Nintendo 3DS systems by March 31st, 2013. That number has been revised to 17.5 million. The total number of Nintendo 3DS systems sold worldwide to date stands at 22.19 million units.”

    They expected to sell 18mil by next year March, but they’ve already exceeded expectations by 4 mil+, so now they decided to slash their estimates to 17.5mil? Huh?

    • malek86

      They expected to sell 18.5 million units in the fiscal year, ie. the period from March 31st 2012 to March 31st 2013.

  • ShawnOtakuSomething

    hmmmmmmm lets see the outcome 

  • http://twitter.com/SladeWilson123 vampirerevolution

    So let me get this straight, they changed there 3ds forecast which is insanely high, to another insanely high but slightly lower figure?

    People still forget the 3ds is outpacing every nintendo handheld up to this point in every region………..

    Like reggie said the ds had 2 holidays and the 3ds is still outselling it

    So really people are worrying over literally nothing

  • XYZ_JolteonZ980

    I hope Nintendo wont repeat the awkward to understand excuse of “we focused on x platform for its launch so that is why we have lower than expected sales of x platform”…theres just been no consistent slate of compelling games to go with the attractive price of the hardware for the 3ds in the states, at least nothing appealing enough to make people want to run out and buy a 3ds…the games out just appeal to well, the same old same old people who most likely bought the 3ds at launch or even were already the traditional pro handheld gamerer.

    • http://twitter.com/SladeWilson123 vampirerevolution

       Ummm speak for yourself.

      The 3ds is outpacing every other nintendo portable to date because of the compelling software.

      Just because they said lower than expected sales doesnt mean the sales were bad

      the 3ds has been the global number 1 system seller since last june…….

      • http://www.siliconera.com/ Ishaan

        The fact of the matter remains that it is still selling lower than Nintendo expected it to.

        • http://twitter.com/SladeWilson123 vampirerevolution

           that is a fact yes. There lofty ridiculous expectations.

      • XYZ_JolteonZ980

        What does it matter if its the number 1 selling system if the company failed to not only meet sales expectations but cut forecasts, clearly, it is an issue that they need to address in the future.

  • http://twitter.com/SladeWilson123 vampirerevolution

    My last post: Lower than expected does not mean bad sales

    No system released this gen has sold 22.2 million in 1.5 years like the 3ds has. Not the ps3, not the ds, not the wii, not anything else

  • idrawrobots

    Why have such lofty expectations?

    • http://twitter.com/SladeWilson123 vampirerevolution

       thats the part I dont get. They set themselves up for pretty much baseless negativity that way.

      The numbers of the 3ds are spectacular right now.  22.2 million in 1.5 years? It took the ps3 over 3 years to get there. Probably closer to 4.

      • Peeka Chu

        Why do people say this?  They took a 40% price-cut in the first 6 months.   The 3DS has no sort of wiggle-room when it comes to pricing and profitability. A price cut of that magnitude is usually done over a period of years, not months.  Doing it too soon cleans out the market for the price conscious consumer.  What will be more telling is how many they sell by 2014.

        I’m not a doom and gloomer btw, I really want the 3DS and Vita (the handhelds) to succeed in the West, on account of their wealth of Japanese style games.  That said, the 3DS isn’t selling up to Nintendo’s expectations, nor can we simply ignore the utter failing and the massive price drop that preceded any success on the market.  

        • http://twitter.com/SladeWilson123 vampirerevolution

          Your talking as if that never happened before. The ps3 had a 100 dollar price drop the week after it launched……..Shit happens.  Every system basically gets either a) a price drop b) new bundle which is effectively a price drop by the first holiday. Every one.

          “the 3DS isn’t selling up to Nintendo’s expectations”

          There extremely lofty expectations.

          22.2 million in 1.5 years is basically unheard of fyi.

          Also keep in mind reggie said the 3ds is still outselling what the ds did. Even though the ds had a second holiday.

          • Peeka Chu

            The PS3 got a $100 price drop the week after it launched?  Citation please.

            And while you’re at it show me a console that’s had a 40% price reduction in the first 6 months.  They did the XL and the price-cut and sales are still trending lower than expected in certain regions.  

            This isn’t by my data its by theirs.  I’m not attacking Nintendo or the 3DS, so let’s just see where things are in 2 years, mmkay? 

            I will say that I’m fairly certain that the 3DS will not outsell the DS, the market has changed too much.  Just like the Vita will struggle to pass PSP sales (unless they really broaden its appeal with apps and services and make serious hardware concessions like built in storage).  The 3DS is only outpacing the DS because of the sizeable price cut.  Eventually market saturation will set in.  Price cuts are strategically and incrementally placed to delay that onset.  That is a fact, that is how the business is done.  If the momentum continues for another year or two based on software alone, I will be very, very surprised.
               

          • http://twitter.com/SladeWilson123 vampirerevolution

            I am a lover, not a fighter. You had your say. I had mine. Lets hug it out bitch (the office)

          • Nemesis_Dawn

            The PS3 had a $100 price drop the week after it launched?!? I think you’ve confused your weeks and years.

      • http://www.siliconera.com/ Ishaan

        OK, stop posting. I just deleted a bunch of your comments, and if you keep posting in ignorance, I will be forced to ban you.

        Now, listen carefully. The company that makes the 3DS is saying they are unhappy with its performance. They expected to sell a certain number of units, and based their future plans around this expectation. And it underperformed.

        That’s all we need. We don’t need your “analytical expertise” and we certainly don’t need misinformed comparisons to the Nintendo DS that don’t take the future prospects of both devices into account. As long as Nintendo says the 3DS is not performing up to the mark, it is not performing up to the mark. Simple as that.

        Please stop posting if all you are going to do is repeat the same point over and over again.

        • sherimae1324

          he thinks and acts as a “video game journalist” oni-chan like those in n4g and i despises them! as if they knew what is going on in the video game industry but in reality they’re just.. just….. trolls! hehe ^_^

      • http://www.siliconera.com/ Ishaan

        OK, stop posting. I just deleted a bunch of your comments, and if you keep posting in ignorance, I will be forced to ban you.

        Now, listen carefully. The company that makes the 3DS is saying they are unhappy with its performance. They expected to sell a certain number of units, and based their future plans around this expectation. And it underperformed.

        That’s all we need. We don’t need your “analytical expertise” and we certainly don’t need misinformed comparisons to the Nintendo DS that don’t take the future prospects of both devices into account. As long as Nintendo says the 3DS is not performing up to the mark, it is not performing up to the mark. Simple as that.

        Please stop posting if all you are going to do is repeat the same point over and over again.

  • kylehyde

    As I can read, the things are awesome in Japan with the 3DS, but in the west, particulary in the American territory, had not met the expectations. Maybe is time to make some changes on certain American branch and some heads maybe need to roll.

    http://i.imgur.com/FrGHs.jpg

    • http://twitter.com/SladeWilson123 vampirerevolution

       The 3ds is selling more than any portable ever has in the west up to this point

      Are expectations met? no

      are these sales breaking records? yeah

      if nintendo is guilty of something its being ridiculous

      • kylehyde

        I agree that 3DS is not failure, I’ve never implied that, but certainly on these days they need a more agresive aprouch. Also, we have to considerer that many of those numbers were from units that sold at loss. They really need those numbers or be closer to them.

        • http://twitter.com/SladeWilson123 vampirerevolution

          Its all about perception.

          All nintendo has to do is forcast 10-13 million, go over it, and people will go WOWWEEEE

          If you forcast a huge number. Dont hit it. But hit an equally large number anyway. People will see it as a failure for some reason

  • http://Gematsu.com/ Bruno Silva

    Oh boy. This will lead lots of uninformed people to make baseless assumptions and to (again) predict the demise of Nintendo.

    It’s always fun to watch them make a fool of themselves in several discussion forums and whatnot tho. As for the news itself…hopefully Nintendo will set their expectations lower in the future and adjust them to the current (bad) economical situation we’re all going through.

    • http://twitter.com/SladeWilson123 vampirerevolution

      what can you do?

      doom and gloom is always accompanied by not researching

      The 3ds is quite literally kicking sales ass globally

      • http://www.siliconera.com/ Ishaan

        OK, enough of this ignorance. Banned.

      • sherimae1324

        enough ok tee-hee ^_^

  • http://www.siliconera.com/ Ishaan

    A few thoughts on the Nintendo 3DS situation.

    First, let’s list the 3DS’ challenges in the west:

    Lack of timely software releases: There is a lack of 3DS software in the west, plain and simple. The reason the 3DS is doing well in Japan is because it receives a steady stream of software support from Japanese publishers. Between indifference from western publishers and localization time causing delays to Japanese games, the 3DS has not been seeing consistent, well-timed releases in the west. The content is there, but it is simply taking too long to be released.

    Lack of mainstream software: This refers to a lack of software that can only be done on a traditional portable device—ie; not on a phone—and catches the eye of a lot of consumers. Scattered releases of Mario games is not the solution. There needs to be more; much more. This ties in with the previous point.

    System features holding back software: Did people here know that Style Savvy: Trendsetters has the ability to take screenshots (in 3D) at any point within the game and save them to the SD Card? This is the kind of feature that gets people sharing their experiences and talking, and has the potential to increase software sales through word-of-mouth. It should be a standard 3DS function on the OS level, and it isn’t.

    Ironically, this is a situation where the 3DS’ own features (or lack thereof) are holding back its best games, in a sense. There’s nothing that enables 3DS users to communicate with each other and help spread the word about games. As just one example, Kid Icarus: Uprising is a game that would have benefitted from such a feature. Its multiplayer mode should have caught on in a much bigger way than it did. 

    Now, what solutions could one propose to provide some much-needed course-correction?

    The definition of “mainstream” software: As many have pointed out before, the Brain Age and Nintendogs ships have sailed. Those games simply are not popular enough any more to justify the cost of purchase and will do nothing to help the 3DS’ prospects in the west. That having been said, there are still several franchises that have historically performed very well on portable systems, and still have the potential to do so today.

    Franchises like Final Fantasy, Kingdom Hearts, and other such games with large, dedicated followings have always done very well on portables in the western market. Nintendo need to go after mainstream hits such as these, and focus on ensuring they’re part of the upcoming library. They won’t have the same impact on hardware that Mario or Pokémon would, but they will most certainly move a lot of copies of software, which is equally important.

    Get cracking on Miiverse: Sharing, as mentioned before, is a major problem. There’s no way for 3DS users to show their friends what’s good about a game or share their experiences with them via screenshots. One of the major features of Miiverse that has been talked about for Wii U is the ability to take and share screenshots as an OS-level function. When Miiverse is eventually brought to 3DS, it needs to facilitate communication. Preferably sooner rather than later.

    Online multiplayer: As with consoles, the most long-lasting games on portables are the ones that have online multiplayer. Kid Icarus: Uprising and Mario Kart 7 both have very healthy online multiplayer communities. I personally still play Resident Evil: Mercenaries 3D sometimes with Siliconera readers, too. Online muliplayer keeps people talking about the game in question and at this point, it’s a feature that shouldn’t be overlooked. Again, sharing and communication.

    Disclaimer: Just to clarify, in case someone wonders why I didn’t mention Pokémon or something similar, it’s because I’m focusing on viable long-term solutions that don’t rely on putting all of your eggs in one basket.

    • Peeka Chu

      I particularly agree with your first point.  Compared to iOS and Android releases, there is a dearth of titles on handheld systems.  Yes, the old quality> quantity argument is raised, but unfortunately it doesn’t hold weight in today’s market.  Consumers – the bulk of them – want instantly available, cheap content, and in abundance; because they’re using their mobile devices to pass the time and don’t care about “deep” experiences as much as accessibility, cost and diversity.  

      • http://www.siliconera.com/ Ishaan

        Yeah, especially these past few months, iOS has been kicking butt. Even if the games being released on there are ports of older titles (GTA, Crazy Taxi, Soulcalibur etc.), the fact that they’re available for incredibly cheap prices is something that can’t be ignored.

        3DS software really needs to step it up.

        • Trogdor69

          The only game on IOS ive played in the last 6 months is chaos rings 2. That was fantastic.

          Other than that my portable gaming time has been split like this

          Games
          ds- 25 percent
          psp – 25 percent
          3ds – 30 percent
          vita – 9 percent
          ios – 1 percent
          gba – 10 percent

          I havent tried crazy taxi but I found GTA III a broken unplayable mess on ios. I am sorry for my friend who downloaded it and I tried it.

          I am not really sure where you guys are coming from but I wish you guys were playing all the great dedicated portables games I am now. I have sol trigger, rexx, gungir, growlanser, bravely default, project x zone, tactics ogre lodis, kh ddd, paper mario, layton 5 all on the bench ready to be hit

          There isnt enough time in the day for me to play everything

          • http://www.siliconera.com/ Ishaan

            I play more than enough dedicated portable games. The point we’re making is that iOS is at a stage where quantity is making up for quality.

          • Trogdor69

             For me I dont think quantity ever makes up for quality. But for each his own I guess.

            For me personally no controls ( good controls)  is a huge barrier to entry, so the games I like, that isnt a factor, like turn based rpgs. Which is why I enjoyed chaos rings, and even burial dragnir not that long ago and even the occassional kemco rpg.

            I am of the school of thought that things can live harmoniously together

            kind of like this

            http://www.youtube.com/watch?v=mploADKBihc

            But as good as those ios rpgs where. When I play paper mario, etrian IV, fire emblem awakening, REXX, persona golden and other dedicated rpgs soon. I will try my best to remember those ios rpgs, but they wont stand a chance.

            Hey, its not like I only have to own one system so its cool

          • Göran Isacson

            I interpret Ishaan’s comment as not being about what HE likes, but what THE MAJORITY OF CONSUMERS are currently like. Yes, you, I, tons of people on this site are probably very interested and invested gamers who buy a ton of games for a ton of different formats. But the audience from which you can earn the BIG bucks is not.  That is what I take from this- a sizeable chunk of the massive audience Nintendo built up with the DS has moved on to smartphones, and if Nintendo wants them back they have to look at what smartphones are doing that they could be doing as well. And perhaps changes like what Ishaan suggests are what the 3DS needs to accomplish that.

    • Trogdor69

       Ishaan, I respectfully Disagree…….gaming is so passionate sometimes, more than any other media I think……I wish people could get along and game.

  • http://www.siliconera.com/ Ishaan

    A few thoughts on the Nintendo 3DS situation.

    First, let’s list the 3DS’ challenges in the west:

    Lack of timely software releases: There is a lack of 3DS software in the west, plain and simple. The reason the 3DS is doing well in Japan is because it receives a steady stream of software support from Japanese publishers. Between indifference from western publishers and localization time causing delays to Japanese games, the 3DS has not been seeing consistent, well-timed releases in the west. The content is there, but it is simply taking too long to be released.

    Lack of mainstream software: This refers to a lack of software that can only be done on a traditional portable device—ie; not on a phone—and catches the eye of a lot of consumers. Scattered releases of Mario games is not the solution. There needs to be more; much more. This ties in with the previous point.

    System features holding back software: Did people here know that Style Savvy: Trendsetters has the ability to take screenshots (in 3D) at any point within the game and save them to the SD Card? This is the kind of feature that gets people sharing their experiences and talking, and has the potential to increase software sales through word-of-mouth. It should be a standard 3DS function on the OS level, and it isn’t.

    Ironically, this is a situation where the 3DS’ own features (or lack thereof) are holding back its best games, in a sense. There’s nothing that enables 3DS users to communicate with each other and help spread the word about games. As just one example, Kid Icarus: Uprising is a game that would have benefitted from such a feature. Its multiplayer mode should have caught on in a much bigger way than it did. 

    Now, what solutions could one propose to provide some much-needed course-correction?

    The definition of “mainstream” software: As many have pointed out before, the Brain Age and Nintendogs ships have sailed. Those games simply are not popular enough any more to justify the cost of purchase and will do nothing to help the 3DS’ prospects in the west. That having been said, there are still several franchises that have historically performed very well on portable systems, and still have the potential to do so today.

    Franchises like Final Fantasy, Kingdom Hearts, and other such games with large, dedicated followings have always done very well on portables in the western market. Nintendo need to go after mainstream hits such as these, and focus on ensuring they’re part of the upcoming library. They won’t have the same impact on hardware that Mario or Pokémon would, but they will most certainly move a lot of copies of software, which is equally important.

    Get cracking on Miiverse: Sharing, as mentioned before, is a major problem. There’s no way for 3DS users to show their friends what’s good about a game or share their experiences with them via screenshots. One of the major features of Miiverse that has been talked about for Wii U is the ability to take and share screenshots as an OS-level function. When Miiverse is eventually brought to 3DS, it needs to facilitate communication. Preferably sooner rather than later.

    Online multiplayer: As with consoles, the most long-lasting games on portables are the ones that have online multiplayer. Kid Icarus: Uprising and Mario Kart 7 both have very healthy online multiplayer communities. I personally still play Resident Evil: Mercenaries 3D sometimes with Siliconera readers, too. Online muliplayer keeps people talking about the game in question and at this point, it’s a feature that shouldn’t be overlooked. Again, sharing and communication.

    Disclaimer: Just to clarify, in case someone wonders why I didn’t mention Pokémon or something similar, it’s because I’m focusing on viable long-term solutions that don’t rely on putting all of your eggs in one basket.

  • darkfox1

    Japan is loving their 3DS’ huh? Man if the amount of games that are out over there now came or would be here my 3DS would get tons of more love.

    • Trogdor69

      I started importing during the nes era because I couldn’t handle what we weren’t getting. Once I started importing I really started to enjoy gaming more

      (Yes I know the 3ds is region locked I have 2)

      The very first game I imported was megami tensei 1, the second game I got was fire emblem 1

      I havent looked back since.

      In a dream world each region would get all the games of the other regions. It will never happen, and financially I could see why not. But it does hurt others sometimes.

      Importing is also very expensive.

      Personally, I love my 3ds. And ignoring all the hyperbole, the 3ds has really solid stats and numbers.

    • mark zeus lee

      if they made 3DS region free its sales would’ve been higher.

  • http://profile.yahoo.com/6QTAB352VPP7I7MIDAQHFFL7AE enzo

    Where I am, the 3DS is getting closer and closer to reaching the point where more and more people will want to buy one.  One of the major things holding the 3DS back is the software library.  Many people cannot seem to justify buying one just yet, and some people are awaiting games that were set to be released in 2013.  I think 2013 may be a good year for the 3DS.

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