Nintendo Posts First Loss (Smaller than expected)

[heartgold]

Nintendo said on Thursday it will return to profit this year, helped by a weakening yen, after posting its first annual operating loss on shrinking sales of its ageing Wii gaming console and weak demand for its new 3DS handheld device.


A weakening yen is helping boost earnings at the company that sells mostly overseas, while sales of new software titles such as the latest version of Dragon Quest from Square Enix should help underpin earnings, analysts say.

Projected profit, nonetheless, is far below the levels seen during the gaming boom sparked by the launch of its Wii console in 2006.

The company said it expected to sell 18.5 million 3DS devices worldwide, up from 13.5 million in the business year just ended. It said sales of the DS would shrink to 2.5 million from 5.1 million, with the Wii edging up to 10.5 million from 9.8 million.

Weak demand for the new 3DS, launched in February 2011, forced Nintendo to slash the price of the gadget by about a third in August and trim its initial estimates for sales during the business year by 8 million units.

Nintendo is expected to release its successor to the Wii, the Wii U, later this year.

The operating loss of 37.3 billion yen in the year that ended March 31 compared with a consensus estimate of a 41.4 billion yen loss, based on forecasts by 20 analysts surveyed by Thomson Reuters I/B/E/S.

http://www.cnbc.com/id/47184875

 

[Master Mo]

Hmm, Nintendo and Sony having loss but how about Microsoft... Never heard of them having losses.

Also Nintendo is really inbetween getting a new system released and I guess by now everyone who would have bought a Wii for a specific game would have already done that so I don't think DQX will boost Wii sales at all...

I don't mind them concentrating on 3DS and WiiU!

 

[MelodieOctavia]

inb4 "PIRACY IS THE CAUSE OF THIS"

 

[heartgold]

inb4 "PIRACY IS THE CAUSE OF THIS"

It's more due to the stronger yen and the slow down of the Wii and DS.

Add to that, they are not even making profit on the 3DS hardware yet.

 

[MelodieOctavia]

inb4 "PIRACY IS THE CAUSE OF THIS"

It's more due to the stronger yen and the slow down of the Wii and DS.

Add to that, they are not even making profit on the 3DS hardware yet.

Oh I know. I kind of figured, but there's bound to be one or two fuckwits that want to blame piracy for everything.

 

[RupeeClock]

inb4 "PIRACY IS THE CAUSE OF THIS"

It's more due to the stronger yen and the slow down of the Wii and DS.

Add to that, they are not even making profit on the 3DS hardware yet.

Oh I know. I kind of figured, but there's bound to be one or two fuckwits that want to blame piracy for everything.

Of course, Nintendo usually likes to play with its hardware by selling it at a profit, rather than at cost.
I don't know if each 3DS sale is at a cost or breaks even though, but they're certainly not profiting from hardware sales after the price cut, they needed to expand the installed market that will actually buy the games.

With time the manufacturing cost of the 3DS will drop and they will see a small profit from hardware sales again, and with popular titles coming out and a larger install base, they should see profits just from being popular, I'm sure the 3DS will become much more popular with E3 announcements.

 

[Qtis]

Hmm, Nintendo and Sony having loss but how about Microsoft... Never heard of them having losses.

Well Microsoft hasn't made profit with the Xbox/360 (AFAIK), while Sony gaming devision is making profit while some of the other parts of the company aren't. Nintendo being mainly in gaming, taking a hit with one or another part of their core will end up in a loss. MS just has Windows to back up everything.

 

[emigre]

Piracy is the cause of this.

 

[prowler]

ok u forgt somethin

http://www.isnintendodoomed.com/

 

[AlanJohn]

When the 3DS gets hacked, the sales will boost up and it will become the most successful handheld on the planet (unless the vita gets hacked earlier).

 

[X_XSlashX_X]

So pretty much the way I see it. The WiiU is probably the biggest risk for Nintendo ever. Considering the situation they're in, when they release it they're gonna either make it or break it.

 

[xist]

Comparing the situation now to the Wii boom years is crazy, and begging for disappointment. Those numbers would make anything look bad, even a profit! The Wii U is something i think that industry watchers will be viewing intently to find out just how strong Nintendo's hold on the market remains.

 

[freaksloan]

Let's not forget the ECONOMY! Europe is in a double dip recession and we in USA are not too far behind.

 

[mameks]

Let's not forget the ECONOMY! Europe is in a double dip recession and we in USA are not too far behind.

No, it's just purely because they make shit hardware.
Also the only guy to make decent games for them's old and tired of games and they've lost a shit loada money

 

[Erdnaxela]

If even Nintendo is losing money...is video games doomed?

 

[heartgold]

Let's not forget the ECONOMY! Europe is in a double dip recession and we in USA are not too far behind.

No, it's just purely because they make shit hardware.
Also the only guy to make decent games for them's old and tired of games and they've lost a shit loada money

Is that why they are sitting on something like $14 billion pile of cash in the warchest after all that money they made with the Wii and DS sales. They ain't broke, just making less profit now due to external factors, low sales of previous hardware/software and covering costs of R&D of the 3DS and Wii U.

 

[Deleted member 194275]

If I loose my job, I will spend less with entertainment. People are loosing their jobs around the world, Nintendo, Sony, and even the companies where we work will have to deal with it for some months (maybe years).

 

[The Milkman]

Eh, we knew they were operating on a loss for a while, this isn't new. But aren't they makig it up with Software sales?

 

[MelodieOctavia]

Eh, we knew they were operating on a loss for a while, this isn't new. But aren't they makig it up with Software sales?

Well, we have the 3DS selling at a loss, the development of the WiiU, most likely the R&D for the 3DS Lite. All those things add up. It's not like anything is affected, really. a $5 Million hit to their $10 Billion bank account is just a scratch.

 

[ShadowSoldier]

Really? Nintendo has less than 20 billion? I would have guessed they would have at least more than Apple's 40 billion. Eh, Nintendo's still better in every way possible. Hell, I'd rather listen to music on my 3DS than to listen to it on iTunes.