Nintendo Returns To Profitability But Misses Forecast By 50%

By Ishaan . April 24, 2013 . 1:34am

Nintendo have missed their profit forecast by about 50%, owing to weaker-than-expected sales outside Japan. While titles like Paper Mario: Sticker Star and New Super Mario Bros. 2 have been successful, they “did not generate sufficient sales momentum” in overseas markets, along with games like Super Mario 3D Land and Mario Kart 7.

 

Meanwhile, Wii U games New Super Mario Bros. U and Nintendo Land have sold 2.15 million and 2.6 million units respectively, but global Wii U sales are at a mere 3.45 million units, owing to delays in a number of software titles that Nintendo had planned for the device’s launch window.

 

While global Wii U sales are 3.45 million units, global Nintendo 3DS sales are at 31.09 million units. However, both devices missed their sales targets of 4 million and 15 million for the last fiscal year. As a result, while Nintendo are now back to being profitable, their full-year profits were a mere 7.1 billion yen ($71.4 million)—half of their forecast of 14 billion yen ($140.7 million).

 

For the ongoing fiscal year, Nintendo have plans to return to “Nintendo-like” profits and are undertaking a number of initiatives that they have previously outlined, including releasing a steady stream of games for the Nintendo 3DS and Wii U, and helping third-party publishers in Japan bring their 3DS games overseas. The company touched upon several of these titles during a Nintendo Direct presentation last week.

 

Nintendo also plan to promote download sales of their retail software in order to improve profitability. The company plans to sell 9 million Wii U consoles and 18 million Nintendo 3DS portables during the ongoing fiscal year.

 


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  • Wake

    A profit is still a profit. Good for them. Nintendo’s pretty much set this year with the 3DS, as for the Wii U…I think they’re just in the process of hoarding all the potentially good games they have. They’re probably going to release them late in the year to compete against Sony/MS’s next gen launch.

    • http://www.myspace.com/Juan_Rod bluejuan85

      Yeah 3DS is going to bring a lot of profits when the big players start coming out later this year but they really need to deliver on the Wii U I haven’t touched mine for a long while, need games man.

      • Wake

        Same here. Right now, I’m just calling it my Earthbound Machine. It definitely needs more games. I’m not surprised though, next gen systems tend to have that drought at the beginning.

      • neo_firenze

        Yep, WiiU first year software has been absolutely dismal. I know people always complain about “it has no games” on almost EVERY system release in year 1, but WiiU is taking it to a whole new level.

        Between US launch in Nov 2012 until August (Pikmin 3), I will have bought only one game. MH3U, itself an enhanced version of a several years old Wii game. That’s awful. And prospects of future third party support look terrible, so this will be primarily a Nintendo first party machine for me (much like the Gamecube).

        • http://twitter.com/ValeFalkren Laer_HeiSeiRyuu

          Gamecube had it better ._.

    • Ferofax

      Unfortunately, that’s not how big companies see it. The way they work is that they make outlandish sales forecast to please investors/stockholders, and then proceed ahead to try and meet those forecasts. If their forecast is too weak, investors lose heart and start taking their money elsewhere. You can’t just tell investors that “a profit is still a profit”. You have to tell them that they’re gonna be filthy rich, which is why the usually high forecasts.

      • Barrylocke89

        True, but I imagine that it must be a relief to the longer term investors that Nintendos in the Black after having spent so long in the Red with their profits.

        • Ferofax

          I’m pretty sure more than a few investors breathed a hefty sigh after crossing the profit line. Of course, now that they’re making money, it’s about damn time they made TONS of money. At least, that’s how I’d think as an investor. “Okay, guys. Two years, give or take, I held on. I stayed with you. Now that we’re past the red, better make it up to me for those two years!”

  • Göran Isacson

    That Wii U isn’t selling should REALLY not come as a surprise to them considering the lackluster library… I’m just curious as to if it can ever match the numbers they’re hoping to bring in. 9 millions feel like they are WAY over-straining themselves. Heck, even the 3DS numbers seem a little excessive, even with all the good games the system has.

    • puchinri

      I think they realize that themselves. I feel Nintendo at least probably knows that since they didn’t have much to offer software-wise, they shouldn’t/weren’t expecting certain numbers.

      It’s hard to say what the consoles will do, but I expect some titles will help push them closer (when you consider monsters like the AC bundle alone, etc, I can’t imagine they won’t get extremely close).

      • Göran Isacson

        I am curious if they intend to sell 9 million consoles TOTAL (that is to say more like 6-5 million consoles with the 3 million already sold) or if they mean to sell 9 million this year ALONE. Because that is just… I do not see how it could possibly happen. I’ve bought a WiiU but it was with money I received through a grant AND it was as an investment since Bayonetta 2 is going there. Not sure how many others there are out there who thinks like me.

        Though I do wonder how well the AC bundle will help Nintendo here. WIll they be able to hawk Animal Crossing here with it’s strengths as a social game, or will facebook and Farmville prevail in the west?

        • puchinri

          I feel it must be the former, because there isn’t as much left of this year as we think. Unless, of course, they have some clever stuff up their sleeve that they know can garner the sales.

          Honestly, I think bundles in general are a good idea; well, the special ones. It shows the dedicated fanbase of that game that they’re paying attention and care, and it will sell the console (and some people have multiples because of it). As for how they’ll try to reach the social game audience. . . I guess it depends on who they’re aiming at.

          There are people that buy the lesser known social games but don’t play farmville, so they could try to bring those people in. And they could show the people that play Farmville what a richer, wider experience AC offers for a small investment. I don’t know if that’s really the best thing to try, but I think if they do make the effort, they’ll be able to accomplish it.

  • Crevox

    As soon as Brawl U comes out, Nintendo wins and Wii U sales skyrocket

    • KingGunblader

      That’s what I’m waiting for… although I really hope it’s not called “Brawl U” XD

      • http://www.facebook.com/magius.necros Magius Necros

        I’m fond of the name Super Smash Bros. Universe myself.

        • Ferofax

          But the cast has to make the “Universe” part worth it.

          Or, they could also go WiiUltimate Smash Bros, or Ultimate Smash Bros, or variations thereof.

    • raymk

      Well tbh mario kart will pull in some numbers this year as well I promise you that. Smash will just take everyone’s monies even if they don’t want the system. Hell alot of wii owners only bought wii for smash, kinda like I bought gamecube for smash but ended up getting a few good games.

    • Nicholas Gatewood

      Right, as soon as they release this one game we’ll all ignore the fact that its hardware is disappointing and the rest of its software support is lacking.

      I want Nintendo to improve, I want to see them as a viable option. People who claim that their hardware isn’t laughable are only making them worse, though. We should tell them to improve, to step their game up, if we don’t want to constantly be stuck a hardware generation in the past just for wanting to support Nintendo.

      I really don’t think a new Smash game will be enough to fix the Wii U’s woes. Honestly, I don’t know if anything could fix the Wii U.

  • Shariest

    Trying to form a good joke about numbers that will “Kill U”

    Got nuthin’

    • raymk

      Ya got me.

  • http://hedjahead.wordpress.com/ Hedja

    Good to know they’re not suffering. There’s so much doom and gloom around Nintendo no matter which gaming community forum you go to so it’s nice to see some positive news. Sure it’s not a lot of profit but it’s profit and they can build on it. It shows they’re not really knocked out in the dust as some people want you to believe.

    Nintendo’s E3 conference will hopefully blow our minds. If not, we might just be going for another Gamecube which in it self is not a bad thing for Nintendo fans.

    • malek86

      The doom and gloom, while exagerated, has some reason to exist. In general, you want to look at a company’s outlook rather than the present.

      For a similar comparison, Microsoft has been increasing their profits and revenue for almost 10 years straight due to computing sales, but that doesn’t mean they aren’t in a tight spot if you consider how the mobile market is evolving and their position in it. So the naysayers have a point: MS is gonna be in trouble if they don’t improve their business model, and that’s still despite the boatload of money they keep on making every quarter.

      Nintendo is similar: even if they can get through these years making a profit, the problem will come with whatever they have to put out next.

      • sd28

        agreed though i wish this could be stated with out the doom and gloom more often in places other than here

  • Brimfyre

    I’m banking on a Wii U Ambassador program now.

    I’ve got $40 of credit sitting in my WiiU eShop account that I can’t foresee using until Xmas at this rate.

  • malek86

    3DS sales have increased in Japan lately, and we can expect MH4 and Pokemon to drive sales up further (Pokemon for the west as well). I do think 18 millions might be a little too much, but I guess they can always revise the forecast later if things don’t go as well as planned.

    The Wii U worries me more, as I don’t see anything truly noteworthy on the horizon. If they keep missing the boat on third party devs, it will be even worse. That said, we’ll see if Nintendo can improve their performance in the holiday season, as they often do.

  • neo_firenze

    “Nintendo also plan to promote download sales of their retail software in order to improve profitability.”

    Hey Ishaan, can you acknowledge that maybe I’m not as much of a nutcase conspiracy theorist as you might have previously thought? :)

    They’re coming right out and saying what I’ve been speculating – they would rather sell full games digitally than sell physical retail copies of the same games. We’re only going to continue seeing lower retail availability as they train customers to buy this way, and it’s intentional Nintendo strategy to increase profits (and when they hype up high sell through percentages, take it as the obvious PR spin it really is about lower shipment numbers instead of an indication of unexpectedly strong consumer demand). Iwata did make similar comments about digital sales before, so this isn’t new. And it isn’t anything but logical.

    Expect more Fire Emblem Awakening level headaches in obtaining more niche titles, and more Luigi’s Mansion 2-like levels of retail availability (can find it, but it’s noticeably less available than a major Nintendo release would have been as recently as a couple years ago) even for fairly big games.

    Remember, Nintendo hasn’t even been doing digital sales of full retail games for a year yet (New SMB2 last August was their first real effort). They’re only going to continue ramping up that focus as they get more comfortable.

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

      OK, I admit you were on to something now. In fact, I smiled when I saw that mentioned in their report, because you were the first thing that popped into my head. :P

      That said, I don’t think Nintendo have ever hyped up sell-through percentages. No publisher actually does this to my knowledge. The only time we get sell-through percentages is through independent sales trackers like Media Create who have nothing to gain whatsoever from spinning the data one way or another. I do think you’re overreacting a little when it comes to the subject of sell-through percentages.

      • neo_firenze

        Hehe, always fun to talk about this with you. We’ll see how it plays out though, I’m still quite curious to see where and how hard they push for digital.

        For instance, big mainstream-friendly holiday releases… are customers ready to buy those online? You’d have to think people would be less receptive to downloading full games there. So in those cases, I’d kind of expect Nintendo to treat those games just like they have big holiday games in the past.

        Something like Bravely Default, on the other hand… Well, let’s just say that I’ll be sure to remember to pre-order a physical copy of that one to avoid headaches.

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

          I would imagine it’ll be more along the lines of what you suggested. If they’re even a little iffy on how a game is going to sell (like in the case of Fire Emblem), they’ll push digital really hard. That said, I can see there being two exceptions where they choose to push digital for bigger games as well–Animal Crossing and Pokémon.

          Animal Crossing is already being pushed very heavily as a digital title in Japan (to the extent that nearly 1/4 of sales are digital at this point). I would imagine Pokémon will be the same. It’s a very social game and it’s lengthy. The kind of game you want to have on your 3DS at all times, regardless of what other 3DS games you’re playing. And looking at it from it a profitability standpoint, digital revenue on Pokémon is probably going to do them a lot of good.

  • puchinri

    Okay, this is the kind of practicality I like. I am disappointed and sorry for them that they didn’t meet their goals, but I’m glad they realize the difference between profitable and “Nintendo profits,” and that they have logical ways to reach the latter.

    I hope all goes well, and I hope that they can balance their business side with their fans’ wishes (although they’re making strong efforts already, to me).

  • http://www.facebook.com/Mewizkuit Anthony Black

    It’s kinda funny how the two games they listed as not selling as well as expected sold “badly” for completely opposite reasons. Paper Mario sold less because it wasn’t enough like the first two Paper Mario games, while NSMB sold less because it was too much like the first two NSMB games. At least, I’m assuming those are the reasons they didn’t sell as well as expected. They’re the reasons I didn’t buy them, anyways.

    • http://www.segalization.com/ Kuronoa

      Not too far off I suppose. I hear more people satisfied by Paper Mario over NSMB2 in any case.

  • PinkKat

    Of course they got profit. 3ds hardware is probably stupid cheap to make and they sell it for a lot still lol… big owie to them for the sale forecast for wii u.

  • Helepythia

    Just to make sure, is “Nintendo also plan to promote” specifically the use of “plan” proper grammar? I’m just curious, and I tend to add an “s” to it. Is what I do (Ex: He also plans to do so) colloquial or something?
    (Don’t wanna get points knocked off of my future English papers.)

    • Solomon_Kano

      Plan or plans both work here in the same way that referring to the company as a single entity or as a multiple does (like referring to the company as “it” or “they,” respectively), if that makes sense.

      Per your example, you wouldn’t be able to use plan, but since Nintendo is a group you can use the plural as in “[each member of the collective Nintendo] plans to promote” or you can refer to them as a singular entity and say they “plan to promote”.

  • malek86

    It’s still an improvement in comparison to the last fiscal year, when they made quite the loss. It’s not much, but it’s a step forward.

    Overall 3DS sales are roughly the same as the previous fiscal year though, which is a bit worrying if you consider the previous FY had those months when the console wasn’t selling at all. And quite lower than their forecast indeed.

    Still, with Pokemon and MH4 on the horizon, I assume sales will increase this year. Maybe not up to 18 millions (depends on how much Pokemon will improve western sales imho), but I think 16 millions are possible.

  • http://www.siliconera.com/ Ishaan

    You should learn to read. I attributed weaker profits to lower than expected sales of their games, not to positive sales.

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