News Article

Nintendo's First Quarter Financial Results Boosted By 3DS Performance

Posted by Thomas Whitehead

Despite operating loss and Wii U struggles, no change in profit projections

A few months ago Nintendo released its annual financial results, which saw the company make an overall profit but an operational loss, meaning its business had been partly bailed out by economic instruments, as opposed to profiting from selling video games and hardware. The positive was that Nintendo had still finished the year in the black, and made a bold projection of a 100 billion Yen operating profit for this current financial year; after today's first quarter results were revealed, those projections are still in place and unchanged.

What today's results do bring are, for the most part, improvements over the equivalent financial quarter in 2012. Net sales were down, in what is traditionally the slowest sales period of the year, and operating income was a loss of just over 4.9 billion Yen (around $50 million / £33 million); despite this "exchange gains totaling 16.9 billion Yen" contributed to a net profit of just over 8.6 billion yen ($87.8 million / £57.7 million), leaving Nintendo with money in the bank from the quarter.

In terms of hardware and software sales, the news is positive for the 3DS and its games, which have driven Nintendo's results to date. There were 1.4 million 3DS systems sold worldwide in the last three months, along with over 11 million software units; Nintendo states the system is "gaining its sales momentum in the United States and Europe". The fortunes of Wii U, unsurprisingly, were very poor, due to the only notable first party releases — Game & Wario and the New Super Luigi U DLC — failing to drive hardware sales; just 160,000 Wii U systems were sold worldwide over three months, and a little over one million software units. The new system was easily outsold by the Wii, which shifted 210,000 systems and 3.67 million games; the DS, for the record, managed 60,000 hardware units and 2.15 million software sales.

Overall, the Wii U results are unsurprising, as Nintendo placed the emphasis on the second half of 2013 and early 2014 in its annual report; that also explains why its bold profit and unit sales projections remain in place across the board. The 3DS results, considering that this is typically the quarter with the lowest sales, bode well for the system, especially with more high-profile game releases on the way.

Let us know what you think below, and we'll bring you more coverage of the results — and some key landmarks passed — here on Nintendo Life.

[via nintendo.co.jp]

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User Comments (46)

MJKOP

#1

MJKOP said:

How big Is the rest of this year & 2014 for Nintendo? Wii U has to come good. I'm backing the Big N to turn it around. Also, well done Wii

Sanqet

#2

Sanqet said:

wow those wii u sales were worse than i thought 160,000 sold worldwide in three months is poor

Smitherenez

#3

Smitherenez said:

Well, that is pretty abysmal for the WiiU o.O Software sales are higher then I thought they would be. I wonder what the sales figures will look like after the holiday season.

stefenjc

#4

stefenjc said:

Well this didnt include when the Pikman 3 was release so, I hope it will improve the financial results next quarter.

Peach64

#5

Peach64 said:

The Wii U results are unsurprising? It's so far beyond the struggles of the PS3 and 3DS. Nintendo said in April they expected to sell another 5,550,000 by the end of the year. They're now 33% through that time period but are not even at 3% of the sales they want.

And 10k between 2 continents? It's in virtual boy territory. Every retailer that drops it is justified, so is every publisher. No bias or conspiracies needed I'm afraid. No wonder ASDA dropped it, it's probably only selling a couple of hundred units a month in the entirety of the UK.

dumedum

#6

dumedum said:

Excellent results. Hopefully it will give another boost to the stock price too.

Peek-a-boo

#7

Peek-a-boo said:

It gets even worse when you consider that only 10,000 of them were sold in the 'other' territories which include ALL of Europe, Russia, China, Australia, etc. etc.

Ouch indeed!

mookysam

#8

mookysam said:

Apparently just 10,000 of those Wii Us were sold in Europe and Australia. Appalling, Nintendo.

ThomasBW84Admin

#9

ThomasBW84 said:

@Peach64 If there are hardly any games, there'll be hardly any sales. As Nintendo hasn't lowered its projections (which it's done a lot in recent years) I think that says a lot. That quarter was practically a write-off for Wii U. I'm not saying I think that's wise, but that's the way I think it was.

dumedum

#10

dumedum said:

There is nothing to be concerned with the Wii U. It is all perfectly in line with their projections, if you read the documents.

Primary Nintendo product in this quarter: Game & Wario, which nobody bought.

Upcoming Nintendo products:
Pikmin 3
New Super Luigi U
Pokemon rumble U
Wondeful 101
Zelda ww HD
Wii Party U
dKCR: TP
Sochi 2014 olympics game
Super Mario 3D world
Wii Fit U
Mario Kart 8
Super Smash Bros.
Bayonetta 2
X
Yarn Yoshi
Zelda New Title
SHT X Fire Emblem.

This is Nintendo's list... there is a reason why it's all good. That's 17 (!) First Party (in the publishing sense) Nintendo Exclusives compared to ONE (!!!!!) I wonder how many times do they need to say that everything was delayed in the Wii U, but there is a steady plan.

Peek-a-boo

#11

Peek-a-boo said:

@dumedum How on Earth can you say there is 'nothing to be concerned' about regarding the Wii U?!

Those figures are the lowest for any console, well ... ever!

dumedum

#12

dumedum said:

@Peek-a-boo because just like Thomas said, they didn't release the games either. If you check the information provided by Nintendo, you see they only released one game in the entire quarter, and it was a niche title (Wario). They have 17 upcoming first party games. Yes, they were supposed to be sooner but they already acknowledged that. This is in line of what they expect.

Peach64

#13

Peach64 said:

But there was Monster Hunter Ultimate and Lego City, two games that people said would turn it around, which both got good scores, and there was huge price cues with many retailers in the UK giving price cuts of over £100, and it's still sold nothing.

I agree it will improve, and the Wii U probably will be the highest selling console this Christmas due to PS3 and 360 coming to the end, and limited stock for their successors, but what annoys me is whether a publisher or retailer drops the Wii U, people here call it a conspiracy. One comment in the recent article about ASDA genuinely accused them of being paid off by Microsoft and Sony. Wii U is not doomed but right now it is one of the worst selling consoles in history and that has consequences.

GuttaBunny

#14

GuttaBunny said:

I work hard for my money Nintendo, and i want to give some to you......please release a couple of must buy games a month. Thanks.

Jazzer94

#15

Jazzer94 said:

All I'm hoping is they stick with it and keep producing the games for Wii U people want.

Farmboy74

#16

Farmboy74 said:

No one can deny that these sales figures are nasty. Now is the time to start forging alliances with games developers or just out right but them out (Atlus, Sega & Platinum) would do nicely. If Nintendo can increase the amount of it's internal studios then I would say it could just about to support the Wii U on it's own. To this end they could learn a lesson from Sony who have forged alliances with games developers and have also invested in it's own development teams over a number of years.

Legromancer

#17

Legromancer said:

I think there is no way they can turn things around till/during Holiday. Wii U is losing shelf space in major retailers, no one knows what a Wii U is and if they go to buy one before Christmas they will learn that it is a one year old console and that they can get a brand new console for only 50€ more and actually has games. New games. Nintendo can only advertise...Mario 3D World? WindWaker? W101? Pikmin 3? These are not shiny new things, and consumers will notice this. Consumers want shiny new things with... i dunno big marketing behind it. Somehow Nintendo keeps forgetting marketing.

@Farmboy74: Even then it will take 2-3 years till we would see these games. 2015 and 16 will really look rather empty.

Edit No.2: just read it over at NeoGaf; are these really Ouya-like numbers?

Nintenjoe64

#18

Nintenjoe64 said:

These are terrible sales figures but luckily Nintendo will still make decent games that us die-hards will all buy and enjoy and then in 15 years time when they get a re-release on another Nintendo console, everyone in the whole of gaming will claim that they owned every major Wii U game and that they were the best games ever (exactly like they do with the GC).

Farmboy74

#19

Farmboy74 said:

@Legromancer,
Yes forming new alliances and internal software developers and getting their games out will take time, but if they get all this in place now, then hopefully any successor to the Wii U will be in a better position games wise

VolcanoFlamesNL

#21

VolcanoFlamesNL said:

160000 units sold? Woah. Bad.
Well, I know that the next report's gonna be higher than this, because of Pikmin 3.
I estimate 200K+. And when the other games come out, the third report should be good!

mii-gamer

#23

mii-gamer said:

My understanding is that these are shipping numbers, that is number of consoles they sold to their retail channels. What they sold to consumers (sell through numbers) are much higher. Nintendo Life please clarify i think the readers are getting confused

ThomasBW84Admin

#24

ThomasBW84 said:

@mii-gamer Nintendo describes these figures as unit sales, which may mean systems sold by Nintendo to retailers. The figures are massaged either way. Nintendo may sell this number to retailers and report them as sold when they're still on shelves (inflating previous figures) and likewise older stock may mean that, in theory, more Wii U units were sold in the three month period.

As it can swing both ways, and as we can only take the figures in Nintendo's officially released accounts, we just report as is.

mii-gamer

#25

mii-gamer said:

@ThomasBW84 I'm 100% certain these are shipping numbers, this is business jargon. "Sales" to Nintendo means consoles sold to retailers on the other hand "sales" to an average means sold to consumer. From the comments, i think most people are not making the distinction

ThomasBW84Admin

#26

ThomasBW84 said:

@mii-gamer Indeed, but as I said, it's a scenario that flips both ways, with some numbers being higher thanks to the practice and others that are lower. As there are no unified worldwide retail sales figures (heck, they're not even public in a lot of countries), we're left with little choice but — like everyone else — to consider sales figures and numbers from these accounts. It's been that way for years.

You make a valid point, but if Nintendo (and other companies) happily boast of inflated numbers on these grounds — such as using those figures to emphasize success to the public — then the inevitable reverse sometimes happens. They know it and the media knows it, and as the figures we have they still ultimately tell a story and lay out trends over multiple financial reports and accounts.

mii-gamer

#27

mii-gamer said:

@ThomasBW84 Yeh, I am more confused than ever. Nevertheless, regardless of the interpretation - Nintendo is still in a hole with the Wii U. I appreciate that you took the time to respond to my comment

billychaos

#28

billychaos said:

Nintendo is doomed!... there does that make you all feel better? Nintendo should do quite fine by the end of the year. Even if the Wii U feel flat on it's face worse than the virtual boy, Nintendo is not going anywhere. They will just try harder next time. I think once games come out for the system many people will be surprised by the sales boosts but most people will have expected it.

tovare

#29

tovare said:

@mii-gamer: So since the sales were poor in previous months, we could interpret the figures as retailers selling out their inventory and restocking with 160 000 units ?

element187

#30

element187 said:

@Legromancer have you seen the launch lineups for both PS4/xBone ? its a barren wasteland. we get to dust off all the jokes about "NO GAMES, trolololol" from the Wii U's launch to throw it at the PS4 and xBone's launch.... both only have 3 exclusives a piece on launch day.... Nintendo will have at least 12 exclusives available for it this holiday season.

The Wii U was a disaster in sales its first year because the lack of games. If all the games Nintendo announced at E3 were available at launch the story would have been different. Anyone who thinks what a console does in its first year is indicative of its lifetime sales hasn't been paying attention to the video game industry very long.

mii-gamer

#31

mii-gamer said:

@tovare nope, it means retailers have plenty of wii u in stock or they are not running out of stock quickly enough, so therefore they are not buying many consoles from nintendo. It still paints a poor picture, a lot of people are interpreting this as how many consoles were sold to the consumers.

Rect_Pola

#32

Rect_Pola said:

Things haven't really picked up yet. Fourth quarter (and early first) are the real proving grounds. I'll worry if they stumble through that.

Sleepingmudkip

#33

Sleepingmudkip said:

I saw someone on ign say that if wii u flops nintendo should colaborate with sony(not buy or mix) to make the wii u gamepad work on the ps4 and nintendo makes there own games and gets full profit not just some but in trade sony drops the vita. do u agree looks like a strange to me and he even gone on saying miiverse and e-shop can be a seprate from psn and be cnn(club nintendo network)

SuperSah

#34

SuperSah said:

160k worldwide in three months?

I take it that idiot who tried to challenge me the other day about Wii U sales is safely shut-up.

astros75

#35

astros75 said:

Ok well this is the bottom, only brighter things from here on out. Can't wait for the upcoming Wii U games!

Dark_Link

#36

Dark_Link said:

Things will turn around when the games start coming out. We already saw a spike when "Pikmin 3" came out, we will see another little spike when "The Wonderful 101" comes out and I think the first real big spike will be when "Sonic Lost World" and "Wind Waker HD" come out especially if Nintendo has a special edition Zelda Wii U bundle for the Wind Waker. All the games coming out till the end of the year will keep the system selling consistently. For example, I have not bought the system yet but I have intention to get it as soon as enough games are out for the Wii u. A lot of people are like that right now.

Yorumi

#37

Yorumi said:

@ Peek-a-boo no they arn't the lowest for any console ever. I doubt it's even the worst of any nintendo console, let alone any console period. Even the DS started off pretty poorly, I don't know if it was quite as low but it was almost a year before it got more than 2 or 3 games. It's not even surprising that the wii outsold it because the first two years of any console launch are always it's weakest years and the new gen systems are almost always outsold by previous gen systems in that time period.

I really wish people would stop with all the hyperbole and get some historical perspective on console sales instead of expecting world record setting sales in the first year of a console's life. For that matter do you really think it helps when people look at even nintendo fan sites and they don't see any excitement for the upcoming list just oh it's all over, we're doomed, it's done, nintendo is finished. Yeah that'll help sales.

worldofdiggy

#38

worldofdiggy said:

Isn't the 160k figure units shipped? Because the sales of the system worldwide per month (according to retail information on vgchartz) was about 100k for the past quarter and about 200k per month in the 1st quarter.

XFsWorld

#39

XFsWorld said:

If the games that's coming out later this year don't help Wii U much, seriously the Wii U is gonna be doomed. o.o

Technosphile

#40

Technosphile said:

Nothing but a staggering price cut is going to fix this. Like, $199 for the Deluxe staggering.

worldofdiggy

#41

worldofdiggy said:

Guys, these are shipment figures. The Wii U is not selling 30k per month. In case you didn't know, shipments are how much hardware that retailers are ordering. Shipments=/=Sales. I'm not saying the sales are good or anything. I'm saying that they're not that abysmal.

cheleuitte

#42

cheleuitte said:

The sales will improve soon after the release of Zelda HD, Super Mario World and the rest of the games., Pikmin 3 is proof of that!!!

Meaty-cheeky

#43

Meaty-cheeky said:

@Peach64

I agree with you peach64 that Nintendo is in a bad place with the Wii U right now, Nintendo needs to kickstart a new marketing campaign for the Wii U to shine a new light on their failing system. Wii U seriously needs public awareness and some Killer IP's if its going to survive the new console war.

Either Nintendo licks its wounds and drop total support in Wii U ( like what they did with the VirtualBoy) or fight it out in the long run like, what they did with the GameCube.

Legromancer

#44

Legromancer said:

@worldofdiggy
i dunno. Doesn't this mean that actual sales are lower? Isn't this worse? Because retailers don't order system because they still have them and can't get rid of them.

realar

#46

realar said:

Come on Pikmin 3, sell some consoles!!
But thank you 3DS for being so awesome.

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