Nintendo’s slow and arduous journey back to financial prosperity continued today with the release of its latest financial results. The company posted a second consecutive quarterly profit in its financial Q3, which counts sales from September through to December. Revenue was 271 billion yen (roughly $2.3 billion), generating a profit of 31.8 billion yen (around $270 million). A large part of the company’s profits can be attributed to a weak yen, which dramatically increases the value of North American and European sales when converted to Japanese currency. Though the figures are generally pretty healthy, it’s worth noting revenue for the holiday quarter dropped by around 13 percent year-over-year, something that will have a serious knock-on effect on the company’s finances for the financial year.
Why the slide? Well, Wii U sales were down slightly yearly — 1.91 million consoles versus 1.95 million the year earlier — but this drop was easily offset by software gains. Nintendo moved 11.2 million Wii U games in Q3, its best results since the console launched in 2012. Key to this success was Super Smash Bros. for Wii U, which sold around 3.4 million copies since late November. So for once, it’s not the Wii U’s fault. No, instead, the under-performer this quarter was the 3DS family of handheld consoles.
Despite the release of refreshed 3DS and 3DS XL consoles, hardware sales fell by 35 percent year-over-year, from around 7.8 million in 2013 to just 5 million. The hardware launch was restricted to Japan, Australia and New Zealand. With Europe and North America set to get their hands on the new console on February 13th, you can expect a slightly improved showing next quarter from the 3DS.
And what of Amiibo? Nintendo didn’t give us any updates on sales of its adorable NFC figurines, but earlier this month said it had sold around 2.5 million in North America alone. At roughly $13 a pop, that means the company generated over $30 million in just one region — it’s safe to say it’s making a lot of money there.
Nintendo’s Amiibo NFC figurines are selling well.
Reflecting the overall drop in revenues over the past few months, Nintendo has adjusted its expectations for whole financial year. Until today, Nintendo was predicting it would make 40 billion yen profit from 590 billion yen in revenue from April 2013 to March 2014. That would’ve represented a swing back to profit, and the first time it had increased annual revenue in many, many years: it generated 570 billion yen last year, 635 billion the year before, 647 billion the year before that, 1,014 billion the year before that, 1,434 billion the year before — you get the idea, it’s been a rough few years for the company.
Unfortunately, that positivity has been drained by the miss this quarter, as it now expects to generate just 550 billion yen (around $4.67 billion) over the whole year, representing yet another annual drop in revenues for the company. It’s also predicting a return to quarterly losses — around $100 million over the next three months, in fact. It’s not all doom and gloom, though! A smaller Nintendo isn’t necessarily a bad thing, as long as it’s profitable, and the company is still saying that it’ll still swing to its first annual profit in quite some time, although it’s now hoping for just 20 billion yen ($170 million) for the year.
Filed under: Gaming, Nintendo
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Source: Nintendo, (Financial forecast)