Back in May this year Nintendo revealed its losses for the last financial year, with the company projecting profits for the following year as it aims to reverse consecutive poor returns. The Q1 results have now been published and they tell a mixed story, with the quest for profits evidently being left to busier times later in the year.
The financial figures, first of all, show that Nintendo has had a tough summer — between 1st April and 30th June; there's an 8.4% drop in net sales over the equivalent quarter last year, which has led to fairly even losses across the board. Operating income — which is the nuts and bolts of Nintendo's business — brought a loss of 9,470 million Yen, which is roughly $92.7 million / €69.2 million / £54.7 million; the net loss, which is the final picture after all costs are dealt with, was 9,924 million Yen, around $97.2 million / €72.5 million / £57.4 million. The financial report says the following in relation to these figures.
During the three months ended June 30, 2014, for “Nintendo 3DS (3DS, 3DS XL and 2DS),” titles such as “Kirby: Triple Deluxe” and “Tomodachi Life,” released in May and June respectively in the United States and Europe, gained wide popularity. As a consequence, the global sales of the “Nintendo 3DS” hardware and software reached 0.82 million units and 8.57 million units respectively.
With respect to “Wii U,” “Mario Kart 8,” released globally in May, marked 2.82 million units in sales. The worldwide sales of the “Wii U” hardware and software were 0.51 million units and 4.39 units respectively mainly due to a lack of other hit titles this quarter. Net sales as a result were 74.6 billion yen (of which overseas sales were 58.0 billion yen or 77.7% of the total sales), and gross profit was 32.5 billion yen. The operating loss was 9.4 billion yen because total selling, general and administrative expenses including fixed expenses exceeded gross profit. Ordinary loss was 9.9 billion yen and net loss was 9.9 billion yen.
As the above states, Mario Kart 8 sold 2.82 million copies, though Nintendo acknowledged that Wii U sales struggled "due to a lack of other hit titles this quarter". On 3DS, Kirby: Triple Deluxe and Tomodachi Life were described as gaining "wide popularity" in North America and Europe.
Below are the overall hardware and software figures for Q1.
Hardware Sales (Q1) — 510,000 units
Hardware Sales (life to date) — 6.68 million units
Hardware Sales Projection (2014 to 2015) — 3.6 million units
Software Sales (Q1) — 4.39 million units
Software Sales Projection (2014 to 2015) — 20 million units
Hardware Sales (Q1) — 820,000 units
Hardware Sales (life to date) — 44.14 million units
Hardware Sales Projection (2014 to 2015) — 12 million units
Software Sales (Q1) — 8.57 million units
Software Sales Projection (2014 to 2015) — 67 million units
Hardware Sales (Q1) — 90,000 units
Hardware Sales (life to date) — 101.15 million units
Hardware Sales Projection (2014 to 2015) — 500,000 units
Software Sales (Q1) — 1.6 million units
Software Sales Projection (2014 to 2015) — 9 million units
DS figures are no longer provided.
While the Q1 results naturally only tell a small part of the picture, there's no overall positive spin on the overall results. Mario Kart 8 sales are certainly a plus, yet losses of over $90 million are a little worrying in a year when Nintendo is eager to return to profit. A lot of key areas are down on last years Q1 in terms of results — which we'll cover a little later today — that show some poor momentum. That said, and as many that follow the company know, there are big plans and releases coming later this year in the Fall and Holiday season; these results simply emphasize the importance of this upcoming period.
Let us know what you think of these results in the comments below.