Nintendo today reported its year-end fiscal results for the year ended March 31. As expected, the company's profits took a hit, sliding 18.1 percent to 228.6 billion yen ($2.5 billion). This represents the first time in 6 years that Nintendo's profit has fallen. Annual sales also declined considerably, decreasing 22 percent to 1.434 trillion yen ($15.4 billion).
Nintendo blamed these declines primarily on the "results of year-on-year decreases in Wii hardware and Nintendo DS hardware and software sales, a price cut for Wii hardware, and the significant impact of a stronger yen." Fiscal 2011 is anticipated to be tough for Nintendo as well. The company said it's expecting sales to fall 2.4 percent to 1.4 trillion yen ($15 billion) and net income to drop 12.5 percent to 200 billion yen ($2.2 billion).
For the year just ended, Nintendo sold another 20.53 million Wiis, bringing the life-to-date installed based across the globe to 70.93 million. The company also sold another 27.11 million DS units, bringing the portable's worldwide total to 128.89 million. This means the DS has now officially eclipsed the Game Boy.
On the software side, 191.81 million pieces of Wii software were sold in the year, bringing life-to-date Wii software sales to 544.83 million. The DS saw another 151.59 million pieces of software sold, bringing its life-to-date total to 718.5 million.
For the current (2011) fiscal year ending next March, Nintendo expects to sell 18 million more Wiis along with 165 million pieces of software, and the company forecasts 30 million DS units sold with 150 million pieces of software. The company did note that these forecasts include the upcoming sales of the new 3DS handheld.
Nintendo recently announced that it's now including Wii MotionPlus and Wii Sports Resort with its standard Wii hardware package at the same $199 price. The company is also looking to software like Super Mario Galaxy 2 and Metroid: Other M to drive sales in the near-term. Looking further out, the company is excited about the Wii Vitality Sensor and especially the 3DS handheld.
“The new 3DS will create a new opportunity for us,” Nintendo President Satoru Iwata said. “Investors are pinning their hopes on the 3-D DS,” noted Mitsushige Akino of Ichiyoshi Investment Management Co. in Tokyo, according to Bloomberg. “The numbers are below the consensus so it’s not hugely positive, but it’s not reason enough to sell.”
PMC analyst Asif Khan, writing for IndustryGamers, said that despite the risk to revenue growth, now's still a good time to invest in Nintendo.
3 Comments
May 6, 2010
So Nintendo sold 27 million DS units in 12 months... and Apple is now selling about 36 million iPod Touches in a similar period. iPod Touch sales up, DS sales down. That sure sounds like a competitive threat to me, even if Reggie dismisses it. The real problem for Nintendo is the huge shift in the consumer's perceptions; digital distribution, devices have multiple uses other than games, price points are under $10 (with many being free), all games available at once on your device, no stylus necessary. These are things that Nintendo must address somehow if they are to stem further declines in DS sales. Or drop the price substantially, which they are always loath to do. This is going to be tough for Nintendo, because while they have a history of innovation with hardware and games they are very slow to innovate their business models. It's time for some bold moves, Nintendo.
May 6, 2010
You make some very good points Steve. But if it's one thing I've learned from Nintendo over the years, it's to never count them out in the portable space. They usally have a master plan and it works atleast 95% of the time. As for Reggie's dismissals, that just your typical PR ranting.
May 7, 2010
There's a seismic shift in the way the portable gaming industry is going down - it'll be interesting to see how adapted that 3DS is to those changes.