Nintendo Posts A Small Profit, But Wii U Is Still UnderperformingBy: Zach Walton - April 24, 2013
Nintendo posted its annual earnings release this morning as its fiscal year ended in March. The results are not pretty for the Wii U, but the 3DS is still going strong.
Nintendo announced today that the Wii U has sold only 3.45 million units since its launch last November. The company originally had hoped to sell 5.5 million units, but it lowered its forecast to 4 million after a less than great January.
Of course, the really bad news is that the Wii U only managed to sell 200,000 units in the first three months of this year. As Kotaku points out, the Xbox 360 sold more than that in March alone.
Nintendo recognizes that the Wii U is underperforming and takes full responsibility for that. The company had recently delayed a number of key titles for Wii U to later in the year. Nintendo hopes that it can revitalize the Wii U when a number of certifiable hits launch later this year:
For the “Wii U” system, launched in the fiscal year ended March 31, 2013, there were some delays in software development that resulted in intervals between new software title releases at the early stage of this year. Taking this into consideration, for the fiscal year ending March 31, 2014, we plan to concentrate on proactively releasing key Nintendo titles from the second half of this year through next year in order to regain momentum for the platform. Nintendo strives to improve the sales by communicating the compelling nature of our hardware and software to as many people as possible through our new network service called “Miiverse,” which offers an environment where people can empathize with others and share their gaming experiences. We also strive to reduce costs to improve hardware profitability.
As for the 3DS, it’s doing much better than the Wii U. The system sold 5.7 million units in Japan alone. It also sold 4.3 million units in North America, and 4 million units in the rest of the world. Nintendo did, however, sell less 3DS units in North America and Europe this year than it did last year. The only territory to see a sales increase was Japan.
With the release of Monster Hunter 4 later this year, Nintendo’s dominance in Japan is assured. What about the North American and European markets though? Nintendo says that it will continue cranking out key software titles while helping to bring over Japanese games, like the recently announced Bravely Default, to broaden the appeal of the 3DS in the West:
For “Nintendo 3DS,” in order to set in the overseas markets the same trend as in the Japanese market, we will concentrate on proactively releasing key Nintendo titles. “Animal Crossing: New Leaf,” a hit title which contributed to sales growth in Japan, will be released in the U.S. and Europe in June 2013, and the latest titles from the Pokémon series, “Pokémon X Version/Pokémon Y Version,” will be released globally in October 2013. In addition, we are planning to more actively support the Japanese software developers in distributing their key titles overseas. In Japan, we continuously strive to stimulate the market by releasing new titles such as “Tomodachi Collection,” launched on April 18, 2013 as a sequel to the popular “Nintendo DS” version of “Tomodachi Collection.” Furthermore, in overseas markets, we will more actively attempt to boost the sales rate of the downloadable format of packaged software, a sales method that we started last summer, in order to increase the number of new sales opportunities and improve our profitability.
Now this might look like gloom and doom to some, but Nintendo actually had a pretty good year. The company may have posted an operating loss of $366 million, but it made a small profit of $71 million thanks to the depreciation of the yen. The company is still not making a profit with hardware sales so the pressure will be on Nintendo to rejuvenate the Wii U this year.
We can only wait until later this year when Nintendo starts rolling out the heavy hitters to see if the Wii U can get on its feet after such a disappointing launch period.