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May 07, 2014

Third Straight Annual Loss For Nintendo On Sagging Wii U Numbers


Calling Nintendo's newest set of annual numbers bad news might seem harsh, but when compared against the preceding numbers for the last several such annual reports, a dark pattern emerges that should make folks take notice. The newest numbers suggest a pronounced loss for the 2013 fiscal year, and the numbers that make up Nintendo's current picture are all looking somewhat grim.

The newest reports put Nintendo at an operating loss for 2013 of 46.4 billion yen (around $456.9 million U.S.), while the net loss for the company was only slightly brighter at 23.2 billion yen (around $228.45 million U.S.). The reason behind the losses seems to be the two-pronged problem of a lack of sales for the Wii U console, and the accompanying drop in software sales that the lack of console base would represent. The total number of Wii U systems sold worldwide is now around 6.17 million, meaning that for the quarter ending March 31, the company sold a meager 310,000 units. That's reportedly down 20 percent off the same time last year, and really only adds to Nintendo's problems, especially when compared against much better sales numbers in a shorter time frame for both the Xbox One from Microsoft—which had sales of around five million units since its launch back in November—and Sony's PlayStation 4, which sold around seven million units back on April 6.

However, there's a note or two of brightness in the midst of all this. The Nintendo 3DS is still enjoying some impressive sales numbers, including 590,000 sold in just the fourth quarter for a lifetime total of 43.3 million. However, about 2.2 million of those are the 2DS version, which isn't exactly the greatest news for Nintendo, but it's still a bright spot. Additionally, reports from the company indicate that it expects an operating profit for 2014 of 40 billion yen (around $393.16 million U.S.), as the company expects to sell 3.6 million Wii U systems and 12 million 3DS consoles. These expectations, of course, are somewhat tempered by the fact that investors have heard such optimism before, specifically, for 2013 when president and CEO Satoru Iwata expected a 100 billion yen (around $984.7 million U.S) profit for 2013.

To Nintendo's credit, however, it has some plans for the near-term future that might help put a spark under Wii U sales, more than a few of which are likely to coincide with the upcoming Electronics Entertainment Expo (E3) event. For instance, Nintendo reports plans to be “...providing software that takes advantage of the Wii U Gamepad, utilizing its built-in functionality as an NFC reader / writer, and adding Nintendo DS Virtual Console titles to the Wii U software lineup.” There's also word about the next release of “Super Smash Bros,” a release that might well help spark the Nintendo faithful to action, and this month marks the release of “Mario Kart 8,” the newest entry in what has been a very positive series overall for Nintendo.

Some have even wondered if the key to Nintendo's future might not lie in taking better advantage of its past, bringing out its huge array of older titles in an all-you-can-stream style platform. But whatever Nintendo needs to do to get back in the black, it needs to do so quickly. No company can sustain huge losses for any length of time, and profitability is the only sure way to keep the doors open.




Edited by Maurice Nagle

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