Nintendo's Net Income Down 74%; Wii and DS See Sharp Decline

By Xav de Matos, Jan 27, 2011 10:00am PST It's almost customary that when one company announces something shiny and new, its competition does something to extract all of the positive attention for their side of the fence. Call it bad timing but Nintendo didn't follow custom.

Just as Sony was revealing the super-powered successor to the PSP--dubbed NGP--and its plan to bring unspecified PlayStation content to the Android marketplace, Nintendo revealed its financial results for the first nine months of its current fiscal year. According to the report, net income dropped to ¥49,557 million ($596.7M) versus last year's ¥192,601 ($2.3 billion).

As today's fiscal report adds the third quarter results to an already declined first half, Nintendo maintains the drop (totaling 74.3 per cent) is still due to exchange losses and the appreciated yen.

Revenues also dropped nearly 32 per cent to ¥807,990 ($9.7B) for the nine month period ending December 21, 2010, versus the same time last year.

Specific to the newly added Q3 results, Nintendo's profits for the quarter (October to December) were down 46 per cent. Nintendo's operating profit for the period was listed as competitive to Sony and Nintendo at ¥104.3B ($1.3B), down from ¥192.3B a year ago.

According to the report, the drop in the company's reported Q3 was thanks to declining sales of Nintendo's (let's face it, they sold a ton already) Wii and DS gaming systems.

In more positive news, Nintendo did not (once again) adjust its operating profit forecast, leaving it securely at ¥210B. The sales forecast had previously been altered when it became clear Nintendo would not bring its new 3DS handheld to market in time for the holiday season.

With a late February release of the system in Japan, Nintendo now has an opportunity to sneak some of its 3DS profits into the end of its reported fiscal year. Nothing offsets losses like a highly-anticipated new gaming platform! That is if the people of Japan buy a lot of 3DS units in one month. (Spoiler Alert: They probably will).

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10 Threads | 36 Comments

  • They want more funds, then make the wii multimedia. The wii had the market with the motion controllers, now all other consoles have that. But the one thing the wii does not have that other consoles do, media. Others you can stream media from home networks, but not on the wii. So all the people I know laugh at the wii and get a PS3 because of the multimedia. Sure you can hack it, but not really worth it as the hacked software is junk. So if they make the wii multimedia they will get some sales back. Even if they charge for the multimedia app, big deal, people will buy it. It obviously does media well, works great with NetFlix, so it is their own fault for being noobs. If they put out another wii I will not buy it for the simple reason of lack of multimedia on the current system when it could easily have it. That only shows no support or carrying for their customers wants.

  • This is not unforeseen. N is a victim of its own success. As was pointed out the year after launch, the biggest group buying systems are non-gamer adults (your aunt&uncle, parents, etc.). They bought the system, a controller or two, and a game or two all at the time of initial purchase. That group of purchasers aren't buying new games. They simply aren't in the cyclical nature of game releases. After a system's launch the revenue usually shifts to game sales. That simply isn't happening in this case because of the lack of subsequent attach rates.

    Unit sales cannot continue on an upward slope. I guess N's keeping the target the same means they keep expecting the shift to game sales to happen at any time. It's just not going to happen.