Nintendo Downgrades Hardware Sales Forecast on Weaker Than Expected Sales
Nintendo slashed its Wii U hardware shipment forecast for the fiscal year ending March 31 to 4 million, vs. the 5.5 million estimate that it gave in October (CED Oct 25 p9), the company said Wednesday. It also cut its fiscal year sales forecast to 670 billion yen from 810 billion yen “to reflect a lower-than-expected sales outlook based on the sales performance in the year-end sales season and afterward,” it said in an earnings news release.
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The company shipped about 3.1 million Wii U consoles globally through Dec. 31, including 1.3 million in the Americas, about 830,000 in Japan and about 900,000 in other markets, it said. Nintendo didn’t break down the Americas by country, but the U.S. historically accounts for the bulk of its shipments. Europe typically makes up the majority of its shipments to markets outside the Americas and Japan. The Wii U shipped Nov. 18 in the U.S., Nov. 30 in Europe and Dec. 8 in Japan.
Nintendo lowered its Wii U software shipment forecast for the fiscal year to 16 million from 24 million, it said. The company shipped about 11.7 million Wii U software units globally from introduction through Dec. 31, including 6.4 million in the Americas, 1.5 million in Japan and 3.8 million in other markets, it said. Top-selling Wii U games so far included Nintendo’s New Super Mario Bros. U, which it moved 2 million copies of, and Nintendo Land, which moved 2.3 million units, it said.
Nintendo also slashed its 3DS hardware forecast for the fiscal year, saying it now expects to ship 15 million units globally, down from the 18.5 million it estimated in July that was reduced to 17.5 million in October. The company shipped about 29.8 million 3DS systems, including the 3DS XL, globally from introduction through Dec. 31, including 10 million in the Americas, 10.9 million in Japan and 9 million in other markets, it said. Nintendo also lowered its global 3DS software shipment forecast for this fiscal year to 50 million from 70 million.
The company further cut its Wii hardware forecast for the fiscal year as well, saying it now expects to ship 4 million globally, down from its revised forecast of 5 million that was slashed from 10.5 million. Nintendo shipped about 99.4 million Wiis globally from introduction through Dec. 31, including 47.6 million in the Americas, 12.7 million in Japan and 39.1 million in other markets, it said.
Nintendo revenue dipped 2.4 percent in the first nine months of the fiscal year from the prior year, to 543 billion yen ($6.3 billion at $1 = 85.96 yen). But it swung to a 14.5 billion yen profit ($169.2 million) from a 48.4 billion yen loss. Despite year-over-year increases in the sales of 3DS hardware (up 11 percent) and software (up 41 percent), “those gains were not enough to offset decreased sales” of Wii and DS hardware and software, Nintendo said. The strength of the yen averaged against the euro also contributed to the dip in company revenue, it said.
Despite slashing its fiscal year sales forecast, Nintendo boosted its profit forecast to 14 billion yen from 6 billion yen, due at least in part to the weaker Wii U hardware sales forecast. The company is losing an unspecified amount of money on each console sold, as is typical at the start of a console’s life cycle.
Nintendo expects the strong slate of games to be released for the Wii U starting in March to help it “regain momentum” for the new console, it said. The titles will include new entries in the Mario Kart, Super Mario, Legend of Zelda, Lego City, Wii Fit and Pikmin franchises, it said. Titles including Luigi’s Mansion: Dark Moon and Animal Crossing: New Leaf “have the potential to be hardware drivers and bring new audiences to the platform,” it said.
The company shipped 6 million copies of the 3DS game New Super Mario Bros. 2 since it was released in Japan in July, and in the U.S. and Europe in August, it said. New Leaf “sold well in both packaged and downloadable formats” since it was released in Japan, where 2.7 million copies were sold, it said. Nintendo’s “evergreen” 3DS titles including Super Mario 3D Land and Mario Kart 7, released last fiscal year, “kept selling steadily,” it said.