Nintendo made a 43 billion Yen net loss in the past financial year. A straight currency conversion puts the loss at $529m USD or £327m GBP.
The company had originally predicted a 65 billion Yen net loss, but clawed back some of the deficit with strong software, particularly in Japan. The Yen also devalued compared to the company's predictions, helping assets in foreign currencies to generate valuation profit.
Last year Nintendo posted a 77 billion Yen net profit, but this year it was hit hard by a 30% drop in sales from last year, mainly in Europe and North America where Wii sales dropped off severely. It also lost money on every 3DS sold after the price drop in August, but predicts a return to profitability for the handheld by the middle of the current financial year.
This is the first time the company's recorded a full-year net loss since it started releasing consolidated earnings reports in 1981. It's forecast a return to profitability for this financial year, expecting to make a net income of 20 billion Yen.
[source nintendo.co.jp]
Comments 62
Well, at least they're finally gaining momentium with the 3DS. I'm sure profits will go through the roof next financial year.
Besides, if Nintendo Gamer is to be belived, they have enough money to get through any losses till 2051! Nintendo won't be going anywhere for a while.
That's a pretty quick return from losses if it only took them a year to turn things around. Looks like software sales from late last year to present must have been pretty good to cut out about 22 billion yen in predicted losses.
Considering Sony is now expected a loss of ¥380 billion for the financial year I really think that Nintendo is not in that bad a spot...
That sucks but it's not as bad as most people might think during 2006-2009 Nintendo had record sales with the Wii and it's games more then they've ever had B4. So now we're in 2012 where every1 and their mom has a Wii so it's understandable they're going through loses people have just moved on from Wii (except for the Nintendo elitists like us of course!!) They'll get out of this rut when WiiU comes out......I hope
Come on! White 3DS in NA!
You know, they've been in business for a long, LONG time. FINALLY posting a loss is nothing to be ashamed of. At all.
@Sabrewing: EXACTLY. Wii and DS alone have provided enough revenue to keep them going for a long time. We've all seen the figures, they could keep taking losses for a very, VERY long time. Hopefully though, this is the ONLY year they post a loss and with the upcoming Wii U and the 3DS gaining momentum, and what I see as a change in attitude already in motion, they will be back on top again in no time.
hope this is a one time thing. the 3ds was there own fault if they would have had mk 7 and sm3d ready for launch we would be seeing a different story
Nintendo are DDDOOOOOOOOOOOOMMMMMMMEEEEEEDDDD!!!!!
...
Or maybe not.
Unsurprising considering how they've treated the Wii in it's final years.
It won't hurt them financially because of the enormous profits they already made, but their reputation as a console maker has taken a much bigger hit, which will be hard to recover from.
Lots of companies have had a loss this year - global financial crisis and all that.
Not that bad at all . . .
@JimLad I think you have a point, but I think it's also something of a begrudery because of the Wii's runaway success and bringing in all the "casual" gamers to the hobby. "Hardcore" gamers look down on the Wii and subsequently Nintendo because of it.
@cfgk24 A half-billion loss isn't bad? I don't care how much money you have in the bank, or what company it is, this is a massive loss for any company!
The difference with Nintendo is that they don't have other sectors to cover their losses, so they've got to turn things around pretty quickly or their looking at a serious problem, which I'm sure won't be an issue.
So, unlike pretty much every other site is reporting, Nintendo has actually made a net loss previously?
Does anyone have the details on when the last time/s they made an annual loss was/were?
@Kirk I only have access to their financial records for the past 30-something years but Develop and Gamasutra — both experts in this kind of thing — say Nintendo previously posted losses over 30 years ago. It's certainly the first annual loss for Nintendo as a console manufacturer.
I'm still investigating it!
@James Yeah, this would be the first CONSOLE loss, right? Didn't Nintendo make playing cards thirty years ago? What? Did they make a new set of cards and sold them at a loss because poker was dying out?
@James
Interesting.
I look forward to the results of your investigations...
It's okay, Nintendo. I have a job now. I will buy as many games as possible. Even though that will only be an insignificant drop in the financial bucket of Nintendo.
@kyuubikid213 Nintendo made and sold a number of different products and services before consoles — love testers, Ultra Hand, love hotels! — and of course it was making arcade games before NES came out. Wouldn't surprise me if they lost Nintendo money!
So, if nintendo lost money on every 3ds sold, then we all made them go bankrupt?
But seriously, theyr'e turning things around fast!
I don't think the Wii has much to do with this. Nintendo constantly told us that the Wii is still getting sales, but they are still at an all time low, so Nintendo did the right thing and dropped 10% of all Wiis right after the announcement of the Wii u. Games were not busts either, like all games got their money back from development, and then some.
The DS had low blame either, Pokemon made them serious cash.
Which leaves us to the 3DS. Makes tonnes of sense that $170 Price is going to pay off in the long run just not in 2011. And Nintendo gave us a total of 25 free games on the e Shop. (20 Ambassador Titles, Pokedex 3D, Exitebike, Four Swords, Nintendo Video and Swapnote)
OK, so here's the skinny.
Nintendo has only been releasing consolidated earnings reports for the past 30 years, so I can't dig any further. "First annual loss in 30 years" is closer to "first annual loss in the 30 years since Nintendo started releasing statistics."
Other sites are saying it's the company's "first-ever loss" but as Nintendo's a 122-year old company and we haven't got records from before 1981, that seems unlikely.
So there you have it. Nintendo may have posted a loss more than 30 years ago but without the earnings reports I can't prove it. Just covering my backside on this one
@James
Cool.
Nice digging to find the facts there James.
@Kirk It's what I do.
(Actually right now I'm eating a pizza but there you go.)
Obligatory doomed comment.
That really isn't that bad when other larger companies are posting record losses. And this makes sense as profits always go down during a transtion.
@James
Which reminds me.
Lunch...
Sony posted, what, a $6 billion loss for last year? $500 million doesn't seem so bad in comparrison.
Does show the gaming industry is going to have to start cutting back a bit. The mainstream boom is over.
XCWarrior But Sony have much more money than Nintendo, right? Plus Nintendo have a very small product portfolio, so whilst Sony can drop loss-making product, Nintendo have to get them profitable.
They didn't lose money on the 3DS they sold me last March.
@Burning_Spear Correct! Good spot. Article updated now.
@James:
LOL, I thought you were going to add, "... lost money on every 3DS sold except Spear's."
Is there anything sadder than seeing a grown Pikachu cry?
@C-Olimar
Its the opposite.
http://www.nytimes.com/2012/04/15/technology/how-sony-fell-behind-in-the-tech-parade.html?_r=2&pagewanted=all
Sony has too many product lines and divisions with little success.
@Burning_Spear ha, I really should have done that!
"Nintendo lost money on every machine except the one bought by Nintendo Life user Burning Spear, who insisted on paying an extra $300 for the privilege. 'I just really like Nintendo,' he said."
@Slapshot .... they got money in the bank to get around with losses untill 2051....
@Kyloctopus
maybe the wii u development /games are expensive?
becuase the 3ds sells as hotcakes now lol it and will gain profit in like september they have profit on the software atleast
You know when something big happens like if you won the lottery, and then there's that moment of pure silence where you don't know what the heck just happened? That's where Nintendo is right now; in the silenced part. They're just now starting to get their marbles back together.
That's pretty good record. Actually a great record in my opinion. Can win 'em all I guess. Here's to hoping this doesn't happen to them again any time soon!
NHK World mentioned this story as well.
http://www3.nhk.or.jp/daily/english/20120426_33.html
During this announcement Satoru Iwata stated in regards of the Nintendo 3DS, "We had decided to lower the price of the new console, to promote sales, even at the expense of short-term profit. The huge loss was due to our misjudgment about the console."
I love my 3DS, and I'm sure Nintendo will start getting profit from the 3DS sales now that so many good games are available and people realize how great this console really is. Wii U also have good chances to help turning things around for nintendo, I'm probably getting one (^_^)
It happens, they just need to brush off and think they aren't invincible to things like this and learn from their mistakes.
Serves them right for being so arrogant with the 3DS. I love Nintendo's games and their creative passion, but their business sense has become pathetic as of late.
The Wii U will probably need to be $299 if they want to avoid repeating the 3DS launch, especially considering heavy rumors that it won't be substantially stronger than PS360 and these consoles will likely go down to $199 within the next couple of years. Maybe they can get away with $349 if the launch lineup and digital strategy is super-strong, but otherwise...
@XCWarrior i guess for the tabloids it's easier for them to pick on nintendo as they've been in the business for a long time and everyone expects them to deliver every single time. and when they don't, they react by posting 'nintendo is doomed' related articles.
A humbling moment, I'm sure.
How hard is it for a company in the gaming industry to post a profit the following year after a year in the red? Has Sony or Microsoft ever posted a loss in their gaming divisions?
well in september the product cost of 3dswill be lower and they will have profit with 3ds sells and when the wii u launches oh my....don't let me get started how muchprfoit they gain
Interesting article and great comments. It will be interesting to see how things go for Nintendo after the release of the Wii U.
Yes, but the Wii U and 3DS will and are making up for it with some pretty solid games. Mario Kart 7, Kid Icarus: Uprising, and Super Mario 3D Land are some really good games out right now that people are buying, Luigi's Mansion 2, Animal Crossing 3D, Fire Emblem Awakening, New Super Mario Bros. 2, whatever is announced at E3, and eventually, Super Smash Bros. Wii U/3DS are gonna all be big hits. Also, Kingdom Hearts 3D(I guess). When the Wii U comes out, it'll be a big hit because it'll be new for Nintendo, with HD graphics, a cool touchscreen and universal remote with a camera and gyro sensor and accelerometer, etc. The games, I'm sure, will be amazing on the Wii U, we've seen what Zelda HD could look like(PLEASE Nintendo, make this come true), Super Smash Wii U will be amazing, Wii Fit Wii U a lot of people will get, Im sure the Marios will be amazing on Wii U, and just IMAGINE Mario Kart on Wii U, not to mention Kid Icarus Wii U. I'm not going to get too upset about this, they have a good future.
@ajcismo A whole family of pikachu and a baby pichu.
@James
I want pizza!
nintendo is in a fine spot
the 3ds is doing better than I thought
This definitely not good, but they'll survive. They need to learn from their mistakes and keep trucking. Sony has been doing much worse. I'm not trying to bash Sony or anything, just saying.
30 years without financial loss, that's nothing to be ashamed about. That would be something to be proud of.
"Sony did worse so Nintendo is great"
Not really a very logical argument. It's possible for companies to do different degrees of "bad."
Nintendo struggled with tough market conditions and the like. It's enough that investors are rightfully concerned, but assuming the Japanese economy begins to recover, Nintendo should be ok.
Well, as I'll say again:
Looks like Mr. Iwata can't afford that extra limousine this year.
You guys used that same Pikachu picture last year lol
Except, I remember it being of higher quality...
@K0M1C Nintendo does good = cake photo. Nintendo does bad = crying Pikachu. Standard journalistic practice!
Well of course, there is only so much that the wii could do... and theres people like me that get fed up and get around to finally buying a hd console... i want to support nintendo but the simple matter of the fact is that wii is not up to par with hd in terms of great games and online play...
Make it so that Europe does buy more 3DS games (from what I heard the 3DS does sell big worldwide, but in America and Japan there are more games sold), Make the Wii u a succes (the downloading retail games option could help a lot), and Nintendo is back on track.
Analists can moan all they want about moving to Apple and stuff, but Nintendo knows what they are doing (though there are many things I would do differently)! And they will stay alive!
By the way: Developing only for external download-systems (like the Apple store) would be Nintendo's death!!
HAHAHAHA @James you're awesome!
Good. Nintendo deserved this for taking out the single player VS mode from Mario Kart 7 just to hype up the online play. MK7 does not need a VS Mode, but I'm mad that Nintendo thinks that taking out battling CPUs is good. No, it's not. If they do this to Smash Bros. then I will quit the "I'm a fan of Nintendo" list forever.
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