Nintendo Reports Unhealthy Financial Report, Slices Up Profit Outlook
October 24, 2012 3:07 PM
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Nintendo hopes the Wii U will help with profits
Nintendo cut its fiscal-year profit outlook by over 50 percent in its latest earnings report -- and some of the other
financial numbers aren't looking too swift
For the six months ended September 30, Nintendo reported a net loss of Y27.99 ($350 million USD), which isn't as bad as the Y70.27 billion ($876 million USD) net loss the video game company reported a year ago. However, revenue took a tumble by 6.8 percent to Y200.9 billion ($2.6 billion USD) during the first half of the fiscal year.
Nintendo doesn't report its earnings on a quarterly basis.
For the 2013 fiscal year, Nintendo has significantly cut its profit outlook from Y20 billion ($250 million USD) to Y6 billion ($75 million USD).
weak 3DS sales
for the slash in profit outlook for the fiscal year 2013. The company expected to sell 17.5 million 3DS units and have only sold 5.06 million in the first half, which makes the 17 million look a bit out of reach.
Other Nintendo hardware has declined as well, such as
(1.32 million units sold in the first half of 2012) and the original DS (980,000 unit sales during the same time period). However, software sales seem to be doing well -- it reached 64.45 million sales during the first half. Wii sales may pick up too, since Nintendo just
cut the price down to $129.99
Nintendo CEO Satoru Iwata recognized that cheap gaming on mobile devices like smartphones and tablets has put the company in a difficult place. While devices like the Nintendo 3DS are also mobile, it's much more convenient to carry one device that makes calls, sends texts, accesses the Internet and offers games instead of just one gadget that only offers games. Despite this challenge, Iwata said that Nintendo is sticking with its traditional gaming machines and titles instead of shifting to other methods.
"Certainly, a new competitive environment has been born," said Iwata. "But we have no plans to use our valuable resources for smart devices."
A lot of Nintendo's gaming future depends on the launch of the Wii U right now, which is the successor to the original Wii console. The Wii U, which is only weeks from release, offers a new gaming experience that Nintendo hopes will draw customers in a different way from smart devices.
The Wii U features a 6.2-inch GamePad controller, 1080p high-definition graphics and 2GB of memory. Nintendo hopes to 5.5 million Wii Us and 24 million Wii U software titles by the end of March 2013.
Wii U will be released on November 18
in the U.S., and customers can choose the basic model for $299.99 USD or the premium model for $349.99 USD.
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10/24/2012 10:05:26 PM
nintendo already bottomed out with the gamecube. nobody seems to remember that they lost practically all share to sony during those days. their ceo was actually fearing for his job back then because of how marginalized they had become.
I think a lot of people see nintendo as going in a different direction with the wii, but you look back at the nes/snes days and they basically did the same thing trying to cash in with super cool radical accessories and advertisements. Their 1st party games were rare, and the only difference was that they had great 3rd parties bringing in content.
If they can get 3rd parties back on the wagon then they'll be fine. If not they're just going to shrink back to their old size.
10/25/2012 2:07:15 AM
Nintendo survived the N64/Gamecube era on GameBoy Advance and Pokemon. Their portable dept is having trouble now with all the smartphone games. I'm not sure if Nintendo has another thing like that up their sleeves. I hope the Wii U does better than I imagine it will...
"Nowadays, security guys break the Mac every single day. Every single day, they come out with a total exploit, your machine can be taken over totally. I dare anybody to do that once a month on the Windows machine." -- Bill Gates
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