We think it's fair to say that a number of enthusiastic Nintendo gamers may have felt a little gloomy over the past few months. The tragic passing of Satoru Iwata was prominent above all else, a loss that gave valuable context to what truly matters. That was a dominant part of the summer, ultimately, and led to a period of leadership transition within Nintendo - with Tatsumi Kimishima taking over the lead role in mid-September - and what has been a fairly quiet period in general for the company.
We've described it before now as a holding pattern, with Nintendo pushing out a few releases - not all of which have been quite what we hoped - and having a number of major games pending. The first mobile game, Club Nintendo's replacement, some key delayed games and, of course, the mysterious NX - all of these are factors that are part of the future, some imminent and others going into 2016. With some major current-gen releases also still in the oven, there's been a lingering sense that we've been playing time before all the drama and excitement of following Nintendo is renewed.
Whether you agree with that assessment or not, Nintendo's financial results from today thankfully didn't fill us with dread. Your humble writer has been on the short straw financial reports duty for over three years now, and after some grisly times the most recent results not only continued a run of stability and profit, but somewhat counteracted the feeling of malaise that has arguably drifted around the big N over the last months.
So, expanding on the information we shared in our original article (linked above) we've decided to share some key statistics that show Nintendo's improvements - and declines, in the interest of balance - in comparison to equivalent figures last year.
Sales At Their Highest Since 2011
Nintendo sold more goods (or at least brought in more cash) in comparison to the first six months of the last financial year, and by quite a margin too - 19.1% up. In fact, the net sales are the highest they've been for that period (1st April to 30th September) since 2011:
- Q1 + Q2 2011/12 - 215,738 million Yen / approx. $1790 million
- Q1 + Q2 2012/13 - 200,994 million Yen / approx. $1668 million
- Q1 + Q2 2013/14 - 196,582 million Yen / approx. $1631 million
- Q1 + Q2 2014/15 - 171,399 million Yen / approx. $1422 million
- Q1 + Q2 2015/16 - 204,182 million Yen / approx. $1694 million
It is true that sales often equal vanity while profit equals sanity (we'll come to profits later) but this is notable nevertheless. Though Nintendo recorded a profit in the 2014 / 2015 financial year, it was arguably down to a mix of frugal business and beneficial exchange rates on the Yen. What we're seeing here, even in a period with only a few conventional hits in stores - namely Splatoon, Animal Crossing: Happy Home Designer and Super Mario Maker, along with the continuation of New 3DS hardware sales from its February launch - is that Nintendo is actually making improved money from selling its goods.
Aside from those three games, amiibo is particularly relevant. Remember that last year's figure above is for the first six months of that year (again, 1st April to 30th September) - which was before amiibo hit the market. Nintendo's sold about 21 million amiibo now, and it's become a valuable earner for the company.
Net Profit is Down, But Nintendo's Core Business is More Profitable
Net profit is the end-of-the-day number, the definitive margin of what money Nintendo's made. On that score Nintendo's tracking behind the last financial year, as you can see below.
- Q1 + Q2 Net Profit 2014/15 - 14,300 million Yen / approx. $118.7 million
- Q1 + Q2 Net Profit 2015/16 - 11,466 million Yen / approx. $95.1 million
A key point, though, is that these profit numbers are affected by things like those exchange rates mentioned above, so don't always reflect the true health of the business. Operating Profit, on the other hand, is representative of the core business of Nintendo - ie making and selling things. It's here that those improving sales outlined above are more evident, as the current financial year is well ahead of its equivalent period from 2014.
- Q1 + Q2 Operating Profit 2014/15 - minus 215 million Yen / an approximate loss of $17.9 million
- Q1 + Q2 Operating Profit 2015/16 - 8977 million Yen / approx. $74.5 million profit
From loss to profit is the key point there. Nintendo's drive for efficiency during its weaker years of the current generation have - combined with sales that are improving - improved the overall picture.
Nintendo's Sticking to Its Sales and Profit Projections
Nintendo hasn't changed its projections in terms of money to be made or units to be sold. The line with this is always similar - the Holiday season is vital and is the most important period. It's tempting for those of us yearning for Star Fox Zero, for example, to scoff at this, yet Nintendo will be placing faith in key franchise releases across Wii U and 3DS. After all it has The Legend of Zelda, Pokémon and Animal Crossing covered across the two platforms, while Nintendo of America will no doubt try and push the merits of Yo-Kai Watch as far as possible.
Many reading these pages may point to Xenoblade Chronicles X as a key release, and for fans that'll be a hugely exciting arrival. Yet Nintendo's gaze - bearing in mind the points we've made about amiibo above - will surely be more-so on Animal Crossing: amiibo Festival. It may be a continually tough sell to some that desire a full entry in the franchise, but positive sales of Happy Home Designer point to the IP having enough clout to command reasonable loyalty from gamers of all types. The Wii U userbase is smaller than on 3DS, of course, but the combination of Animal Crossing with charming amiibo figurines will surely be a focus for Nintendo heading into November.
Ultimately, Nintendo is backing itself to hit its targets in terms of sales; to be fair, they're relatively modest goals in the first place. On top of that its profit projections are also - no doubt - factoring in the performance of its first smart device game, which is expected before the end of the year and (at the time of writing) is due to be revealed very soon.
Finally - Nintendo's Managing Itself Carefully
If reports are to be believed development kits for the NX are already out in the wild, but tellingly Nintendo's expenditure is still being tightly managed. More has been spent on investments - likely referencing purchasing of shares and other unnamed areas - but "research and development" expenses are slightly down compared to Q1 + Q2 last year.
While unexpected delays to products and services can happen, there's a degree of consistency in Nintendo's spending that reflects a highly structured, controlled approach.
Overall, these seem to be a positive set of results for Nintendo. The next six months are vitally important for the company, but the latest batch of figures don't appear to have any nasty surprises.
Stability is a good thing, as it means Nintendo can focus on what it's good at - making games and entertaining its fans.