Nintendo Posts First Ever Annual Loss Due To Slow 3DS SalesBy: Zach Walton - April 26, 2012
Remember when Nintendo was on top of the world raking in all that money with the Nintendo DS and the Wii? You might want to remember those days fondly because Nintendo won’t be seeing them for a while. With struggling Wii sales and a massive 3DS price cut last year, the company has definitely seen better days.
Nintendo released its fiscal year earnings report to investors and it doesn’t look great. For the first time since Nintendo has been a public company, it has posted a loss. It’s not as big of a loss as Sony’s posting earlier this month, but losing $455.9 million is still a pretty big hit.
The loss was due to a variety of reasons. The number one reason we can point out is the rocky start to the launch of the Nintendo 3DS. The console launched at $250 last year and nobody was buying it. As an emergency measure, Nintendo lowered the price to $169.99 and sales took off then. It wasn’t enough to beat back those first few months of bad sales though.
Another reason is the Wii’s struggling performance to stay relevant. The console only sold 9.84 million units last year which isn’t a super great number. That’s the kind of sales we were seeing from the Gamecube in its twilight years. Thankfully, the Wii U is hitting later this year and Nintendo is hoping to see a solid return from it.
The third reason is the major reason most Japanese companies are hurting – the strong yen. To truly understand how badly the yen hurt Nintendo, just look at how much of their sales came from overseas. The earnings report lists oversea sales at 499.4 billion yen, or 77.1 percent of the company’s total sales. With the majority of its sales coming from overseas coupled with a strong yen, it posted an exchange loss of 27.7 billion yen.
So what is Nintendo going to do to turn this around? First, its going to stop selling the Nintendo 3DS below cost in the middle of this fiscal year. The company didn’t clarify whether this meant raising the price of the 3DS again or if the components that make the handheld are coming down in price. I sure hope it’s the latter because raising the price again would be a bad move.
The company also announced a couple of sure fire hit 3DS games coming out this year that should help spur sales including New Super Mario Bros. 2, Animal Crossing and a new Brain Age title. The company also said that it plans to have the Wii U out in Japan, the United States and Europe before the end of the calendar year so that should help as well.
To be honest, the loss isn’t that bad. It just seems bad because it’s Nintendo, the company that never posts a loss. Nintendo will probably say a few more things about it in the coming weeks. Nintendo of America might even issue a statement. We’ll keep you posted on any changes.[h/t: Kotaku]