Back in late October Nintendo reported its Q2 financial results which brought some key improvements. After sustaining a number of consecutive losses the company returned to profit, maintained bold sales projections and was in a position to talk up improved Wii U momentum. We now have the Q3 results - up to 31st December - which include that critical Holiday season, and the outcome is mixed. On a positive we have some big-selling software and Wii U sales largely on target, but on the downside the 3DS 'family' has had its goals revised down, with the delayed release of the New Nintendo 3DS in the West arguably not helping festive sales of the portable outside of Japan and Australia / New Zealand.
Let's start with the key numbers: between 1st April and 31st December Nintendo's Operating income — the core business of making and selling things — brought a profit of 31,604 million Yen, which is roughly $267.4 million / €245.6 million / £176.3 million; we haven't seen these sorts of positive numbers in operating income for some time. Nintendo also made a substantial net profit (483.7% higher than the equivalent of last year) — which is overall money in the business — of 59,515 million Yen, around $503.7 million / €444 million / £332.1 million. The financial report says the following in relation to these figures, providing some sales numbers for key game releases.
During the nine months ended December 31, 2014, for "Nintendo 3DS," "New Nintendo 3DS/New Nintendo 3DS XL," launched as the newest members of the "Nintendo 3DS" family in Japan in October, got off to a good start and continued to sell well. However, as sales of the "Nintendo 3DS" hardware in the United States and in Europe, where "New Nintendo 3DS/New Nintendo 3DS XL" were yet to be launched, did not grow sufficiently, the global sales of the "Nintendo 3DS" family hardware were 7.08 million units. As for the "Nintendo 3DS" software, "Pokémon Omega Ruby/Pokémon Alpha Sapphire" and "Super Smash Bros. for Nintendo 3DS" enjoyed robust sales with 9.35 million units and 6.19 million units sold respectively, while titles such as "Tomodachi Life," "Mario Kart 7" and "Pokémon X/Pokémon Y" showed steady sales. There were also a number of hit titles from third-party publishers in the Japanese market. As a result, the global sales of the "Nintendo 3DS" software were 53.04 million units.
With respect to "Wii U," Nintendo released two big titles, "Mario Kart 8"and "Super Smash Bros. for Wii U," which enable family members and friends to have fun together in their living rooms. These titles sold 4.77 million units and 3.39 million units globally, and the global sales of the "Wii U" hardware and software reached 3.03 million and 20.59 million units respectively.
Once again Nintendo has profited from exchange rate gains courtesy of the weak Yen, yet we do at least have the company making an operating profit despite overall sales being down on the equivalent figures of last year - there have clearly been smart decisions in clearing stock and cutting costs, from that perspective. Nintendo has tweaked some full-year projections based on lower-than-expected 3DS sales and benefits from currency, however - net income and ordinary income expected profits have been increased, but the key business performance is revised down, with the projected operating income profit halved to 20,000 million yen (about $169 million) and overall sales expected to be 6.8% lower than previously thought.
Moving onto hardware and software figures, now, below we have the key numbers from the latest results.
- Hardware Sales (Q1 to Q3) — 3.03 million units (up from 2.41 million units in equivalent period last year)
- Hardware Sales (life to date) — 9.2 million units
- Hardware Sales Projection (2014 to 2015) — 3.6 million units
- Software Sales (Q1 to Q3) — 20.59 million units (up from 15.96 million units in equivalent period last year)
- Software Sales Projection (2014 to 2015) — 25 million units (increased by 5 million since Q2 results)
- Hardware Sales (Q1 to Q3) — 7.08 million units (down from 11.65 million in equivalent period last year)
- Hardware Sales (life to date) — 50.41 million units
- Hardware Sales Projection (2014 to 2015) — 9 million units (down from 12 million in Q2)
- Software Sales (Q1 to Q3) — 53.04 million units (down from 57.25 million in equivalent period last year)
- Software Sales Projection (2014 to 2015) — 61 million units (down from 67 million in Q2)
- Hardware Sales (Q1 to Q3) — 380,000 units (down from 1.07 million in equivalent period last year)
- Hardware Sales (life to date) — 101.44 million units
- Hardware Sales Projection (2014 to 2015) — 500,000 units
- Software Sales (Q1 to Q3) — 10.05 million units (down from 23.27 million in equivalent period last year)
- Software Sales Projection (2014 to 2015) — 11 million units
DS figures are no longer provided.
The Wii U is the overall winner in terms of momentum, with the success of major games like Super Smash Bros. for Wii U and Mario Kart 8 helping it achieve improved numbers over last year, with Nintendo even increasing its estimates of game sales. The only downside is that while the hardware improved its fortunes handsomely in the West, its hardware and software sales are actually down (compared to last year's figures) in Japan.
The 3DS will be Nintendo's big disappointment in these results, especially as it's had to slash estimated yearly hardware sales from 12 million to 9 million, a 25% cut. The New Nintendo 3DS models hit 1.84 million sales up to the end of 2014 in Japan and Australia / New Zealand, with the New XL dominant on 1.26 million, but sharp drops for the older hardware wiped out that positive. Much will rely on the New Nintendo 3DS in the West to help the system towards its new 9 million sales target, while Nintendo is sure to be trying to address a decline in new game releases over the equivalent spell in 2013.
Overall there are positives, however. Nintendo remains in profit and the Wii U's momentum continues to move in the right direction - Nintendo is no doubt plotting to maintain that and boost the 3DS family of systems through the rest of 2015.
So there you have it, let us know what you think of these results in the comments below.
Image credit: leavelucktogames.com