Nintendo Posts a Profit as Wii U and 3DS Sales Miss Targets
Wii U and 3DS sales disappoint as Nintendo’s profits fail to meet targets.
Nintendo has announced a profit for the fiscal year ending March 31st even as sales of the Wii U and 3DS failed to meet targets. The company also said it had operating loss during the period.
Nintendo's net income for the year was 7 billion yen ($74.1 million) compared to a massive loss of 43 billion yen ($434 million) for the previous year. Nintendo's profit was half of what the company forecast in Janurary.
However, Nintendo's positive result was largely due to currency exchange gains made as a result of the declining value of the yen.
Net sales decreased by 1.9% year-on-year to 635 billion yen ($6.4 billion) and the company's net loss was posted at 36 billion yen ($366.2 million). This is a result of the "fact that Wii U hardware sales have a negative impact on Nintendo's profits" as each unit is sold at a loss.
Wii U sales for the five months from launch in November to March 31st stood at 3.45 million consoles, 550,000 million short of Nintendo's estimate of 4 million, a revised forecast. Nintendo had originally expected to sell 5.5 million units during that period. In addition, Wii U sales in Europe have failed to reach 1 million by March 31st.
Sales rose in Nintendo's home market during the period meaning Japan has overtaken Europe to become Nintendo's second biggest territory behind North America. 1.52 million Wii Us have been sold in North America while 920,000 have been sold in Japan.
During the 2012 calender year Nintendo sold 3 million Wii U's meaning roughly only 450,000 consoles have been sold per month so far in 2013. Software sales for the Wii U meanwhile stand at 13.42 million games to date.
3DS sales also failed to meet expectations with 13.95 million handhelds shifted compared to estimates of 15 million while game sales stood at 49.61 million units, just short of Nintendo's projections of 15 million.
For the current fiscal year to March 31st 2014 Nintendo has forecasted net sales of 920 billion yen ($9.2 billion), an operating income of 100 billion yen ($1 billion) as well as a net profit of 55 million yen ($553 million). The company anticipates selling 9 million Wii U consoles and 38 million games for the system. Nintendo also expects to sell 18 million 3DS systems and 80 million games for the platform.