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Nintendo posts $457 million year-end loss after revised forecast

updated 10:25 pm EDT, Wed May 7, 2014

Wii U and 3DS sales fail to meet adjusted forecast from January

Nintendo released its 2013 year-end report today, to disappointing results. The company announced that it posted a $457 million loss on the back of slumping sales of the Wii U and 3DS hardware units. The loss comes even after the company had already revised its sales forecast downward in January to anticipate more realistic sales figures.

Net sales fell 3.1 percent behind the January revised figures, seeing a shortage of $1.7 million. Sales over the 2013 fiscal year declined nearly 10 percent, falling from $6.3 billion to $5.7 billion. Nintendo places the reason for decline solely on the back of the lower-than-expected sales of the Wii U and the 3DS. Software revenues for the company remain promising, pushing 67.89 million game units for the 3DS and 18.86 million for the Wii U. Software sales, while strong, could not make up for the excessive estimates from the beginning of the year.

According to the report, "the Wii U hardware still has a negative impact on Nintendo's profits, owing mainly to its marketing in the United States and Europe." This is in spite of overseas sales accounting for 69 percent of the net sales for the company. The Wii U only cleared 2.72 million consoles sold when the company expected 2.87 million, a shortage of five percent. The figure is a far cry from the initial nine million sales estimate -- over a 69 percent difference -- that was given at the beginning of the company's fiscal year.

The 3DS sold 12.24 million units, but was expected to clear 13.5 million units by fiscal year end. Initial numbers estimated sales of 18 million units, resulting in a shortage of nine percent from adjusted figures, and over 30 percent over the original estimates.

The company promises a positive outlook rolling into the next fiscal year, announcing an expectation of $393 million in profit. Nintendo says they have a "challenging sales situation" with the Wii U, but the console maker will focus on a plan to stimulate sales of the aging console. First-party software sales will be the key to drawing in users to the console, including titles like Super Mario 3D World and New Super Mario Brothers U. Titles will also be developed to focus on the use of the Gamepad, a component of the Wii U that initially drew in customers because of its innovation.

Forecasts for the Wii U for the next year are only estimated at sales of 3.6 million consoles. While the numbers aren't as high as the start of the 2013 fiscal year, the number is significantly higher than the sales for 2013 that weren't met. For Nintendo to consider a growth in sales for a console that is years older than the Xbox One -- which is itself struggling to keep up in sales with the Playstation 4 -- seems shortsighted for the company. Comparatively, the 3DS handheld sales are listed as 12 million, which offers a slight decline from the number of actually units sold in 2013.

In another move to grow revenue, Nintendo is looking to improve the "quality of life" in entertainment through its consoles. CEO Satoru Iwata has mentioned his intention to build upon health features for the system before, but has not yet provided specific details. There is mention that Nintendo will also open up its pool of character IP for licensing in areas other than games as well.

by MacNN Staff



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