Nintendo Financial Results Deliver Profits but Predict Severe Drops in Expected Wii U and 3DS Sales

"Predict Severe Drops in Expected Wii U and 3DS Sales"

No, really?!

Damn.

They must have some unannounced smaller Wii U titles ,if not how do they expect to shift 15 million?Paper Mario and TMS #FE aren't going to be big sellers and Zelda U will have only had 1 month on the market.Even it's sales will likely be poor due to NX.

"Pokemon Sun and Moon and Metroid Prime: Federation Force have been highlighted as key 3DS titles"

They can delude themselves, but they can't fool me.

Im surprised the 3DS has predicted sales that high since its basically a dinosaur. Pokemon games sell though

Does it give the R&D spend 15/16 vs last year? Keen to get an idea of what they're spending on the NX development.

@SanderEvers Virtual Boy was marketed as portable (as long as you had a table nearby)

@SanderEvers The Virtua Boy was classed as a portable by Nintendo.It was self contained and ran on batteries .

I don't think they'll sell that many 3DS consoles. Will Pokemon really sell hardware? I know it will sell amazingly well itself, but are there Pokemon fans out there without 3DS when the 3DS has already had two Pokemon titles?

Metroid Prime: Federation Force will be a key title in their eyes?? I guess we can all kiss goodbye to the Metroid series then. That game is going to flop so hard it's not even funny and Nintendo will come up with statement like:

"Previous key releases have convinced us that there's no interest in the franchise anymore"

You've heard it here first.

Whatever NX turns out to be, I really don't want some crazy gadget or a console hampered by it's predecessor or with some whack controls.

I'm most likely among the few that wish Nintendo would focus on a traditional game console at it's core. A "modern day SNES" where the games really sell and the system being backward compatible for those who own previous systems.

Able to upscale classics to 1080p and if the consumer so desires to support Wii or Wii U controls to play such classics while bringing in potential third party support and the stuff of dreams long wished for over many years.

I want Nintendo to succeed like everyone else but without the potential risk of alienating their consumers

@Steel76 Well for the holidays they have Sticker Star 2, and uhh... Yeah

800.000 Wii U's all these projections are worse than I ever imagined...

This year could be a close run thing between Wii and Wii U for sales if Wii gets another Just Dance.

Not surprising. I knew 2017 would be the NX release date, but it sounds like E3 will be worse than last years (which is almost impossible). This gen started in 2011/12 and will end in 2017. That is the usual Nintendo console cycle length.

@Royalblues

Then why are you on a Nintendo site?

i guess 2016 is a write off for nintendo.

I expect the Wii U to get more Wii software releases in the eShop to fill some gaps. Be nice to think that Fire Emblem would make a showing; maybe the Pikmin New Play Control games, but it may just end up being Skyward Sword.

I've got such a backlog on Wii U that I'm fine if that's the end of the trip for the system. I still enjoy it and I'm looking forward to The Pinball Arcade finally gracing it. Even if Nintendo has no more big sellers there's still going to be little third party games coming to it for another year.

More bothered by the fact there are only four games in the pipe for the Wii U right now for an entire year. Guess I will be finally be pushed to pick up some of the on the edge titles in the library (or just save my money for next time around).

I'm extremely concerned with the shape Iwata left Nintendo.

This is actually the culmination of a process of disillusionment over the past twenty years that I'm not sure Nintendo can survive as a whole.

They might even have to return to their core business - making and distributing hanafuda cards.

Well, pretty much as expected, then.

On a side note; I'm now fully convinced NX will not be coming in March 2017,but instead be delayed to layer in the year. If they've no problems having zero meaningful products for the rest of 2016 and into 2017, and they plan to have basically no E3 presence apart from Zelda, it's pretty obvious. Not even an NX appearance @E3? No way the thing's launching in March 2017, then.

It's disheartening enough when you see Nintendo-doomed articles on the internet. It's even more sad when Nintendo is forecasting their own doom for an entire year.

Welp, I've got a heck of a backlog. Looks like this is the year I'm going to put a dent in it, because nothing new is coming out.

I suspect those Wii U projections mean that they have indeed stopped manufacturing and are merely selling through the available stock.

The 3DS will do fine. Fates and Pokemon alongside some key titles if lucky, will boost its sales big time! I'm very positive.

Its unfortunate that the Wii U sold poorly and we didn't even get the chance to see how Star Fox Zero sold in the end.

Expecting price drops for the Wii U later this year right before the holidays will probably shift a lot of units right before the NX release as well.

I'm not complaining at all because I hope they are working on a bunch of release titles for the NX. So if next fall and winter have no games, I'll be fine with it. I have a bunch to catch up on anyways cough Xenoblade cough

@OorWullie

They count total games sales, not just Nintendo produced titles. 15 million is somewhat realistic. It assumes that the 800,000 new owners buy 3 Wii U games and existing owners buy 1 game next year.

Ummmm... Nintendo sealed the Wii U fate by not releasing any new games! Duh. Also I do think this means we will get one or two more games this year.

@ungibbed wow. I like your idea. But but Miyamoto will probably insist that I have some new wacky insane gimmick ugggggg...

I just hope I can grab an extra game pad or Wii U bundle sometime in the future.

@Project_Dolphin

Nintendo made a profit by keeping prices higher and providing less value. Why should we be happy about that?

What they don't realize is they're sinking their brand, not just the WiiU. Who, outside the hardcore fans, will buy an NX?

Federation Force as a key title? Pokemon Sun and Moon, yeah, but FedForce has been received so negatively I don't know why they expect it to sell well. Personally, I might pick it up if I have extra cash but I don't know about what others are doing

@Project_Dolphin

Nintendo had their lowest sales in 5 years and their highest operating profit in 5 years. That's not a good mix. The sales trend isn't sustainable and people like me are fed up because you have to pay the Nintendo premium since Nintendo games haven't been able to generate much market interest. Bravo for Nintendo but as a consumer this isn't the way I want them to drive profitabilty.

@TheWPCTraveler Well, you'll be happy to know that their "core business" is actually intact:

https://www.nintendo.co.jp/n09/hana-kabu_items/index.html

They also produce the Pokémon Hanafuda cards, but those are not in the page for some reason.

And they even produce trump cards (French playing cards), if I'm not mistaken the last of those were dedicated to the 30th anniversary of Super Mario Bros.:

https://www.nintendo.co.jp/n09/chara_t_m/index.html

I'm more worried about them seeing the success of mobile titles such as Miitomo and gradually thinking a new path to get mainly there...

Only 800K for Wii U? Well that pretty much tells us that we are getting basically nothing for it this year <_<

A 350% drop won't happen if you have some killer apps to prop it up Like Smash, Mario Kart, and Splatoon have done.

@Yasume
They're not that stupid.

@Project_Dolphin

I'm not a shareholder so I'm indifferent if they make money or not. It's clear they aggressively cut costs accross the organization. Did we as consumers see lower prices? No. Did we as consumers see more content as part of a re-org? No. So I don't know how you can argue that Nintendo making more money off it's existing consumers right now is good for me.

Nintendo is in a transition period. That might be good for their finances and bad for consumers or it might be good for both or it might be bad for both. It is way too early to weigh in that they've rounded the sustainability corner.

You give false proof of your argument. Nintendo is in process of change because they were losing money. That can be good if they learn from their past and competitors and deliver better products in the future. Or it could be bad for me if they stop making consoles/games and focus on apps like Miitomo. Profitibility isn't necessarily good for me if it means 100 Miitomo like apps a year and fewer core games, because I want an enhaced Nintendo, not an entirely different Nintendo than the one I grew to love.

So I guess profit/loss both can or can't be good for the consumer. And at this point I'm not willing to say that Nintendo having it's largest profit and worse sales in 5 years is leading to better things for me.

Predictable.

Well if NX is to be revealed this year, surly a lot of retailers will be getting rid of their Wii U stocks by reducing the console a lot by Black Friday/Xmas period right?

@Project_Dolphin

I've been consistent. What Nintendo is doing isn't working in the market. Whether they make a small profit or have a small loss, doesn't change the fact that these are dissapointing financials. Particularly around sales.

@Project_Dolphin

I'm trying to analyze the situation. It's sad that you think alternative viewpoints are "crying/complaining". In a global sense, all forum dialogue could be viewed as that (including yours), but I don't think thats conducive to dialoguing or will bringing that into conversations lead to positive interactions.

Please try to add actual content though instead of ignoring my messages and repeating profit is good in attemptingly clever ways.

People bought Wiis in the past year? Really? That's cool, to say the least.

@Project_Dolphin

We still don't know if Wii U made a profit over its life and the reduction in sales every year for at least 5 years is a big dissapointment.

If me not liking Miitomo is complaining than so be it, it's a forum. If you want to list a rebuttal on how great it is be my guest. Repeatly saying stop being a whiner is stupid and doesn't lead the discussion anywhere. Weather or not I continue to play video games is irrelevant to anything we are discussing and a waste of forum space.

I think 3DS is getting a price cut this holiday, so I believe the 5 million forecast for hardware sales is a realistic one. Same for the 55 million in software sales, thanks to a new gen Pokémon, Yokai Watch, and a bunch of key western localizations (FE Fates for Europe, Monster Hunter Generations, Dragon Quest 7 & 8, Bravely Second. etc).

Those Wii U sales forecasts are shockingly low. Like I had to do a double take. 800,000 shipped during the WHOLE FISCAL YEAR!!! Damn...that's utterly terrible.

@westman98

I have 2 thoughts on the Wii U 800,000 estimate.

Thought 1, Nintendo has made a history of revising sales downward for the Wii U. They don't want to do that anymore. Investors have moved towards looking at mobile and NX for future profits and aren't likely to be concerned that the Wii U target is likely 1,000,000 short.

Thought 2, Nintendo probably tried to get the NX into the holiday window but failed. The thinking was probably that June onward they'd be pushing the NX, not the Wii U. So the 800,000 estimate may have been more reasonable prior to an NX delay. But given the small numbers they didn't see the point in going back and re-estimating Wii U sales.

@cleveland124 "Nintendo probably tried to get the NX into the holiday window but failed"

That's my belief as well.

@Project_Dolphin

Lol, do I need to start at a basic level and explain what a forum is and the point of a forum? This article is about finances and sales. Clearly discussion about the Wii U sales and profitability would be expected when posting this article. Maybe it's not relative to whatever tangent you are trying to draw, but you can feel free not to respond to my posts if you don't care about them. Our back and forth even started on your comment about profitability. So if it's irrelevant why did you bring it up and then respond to it further?

"Nintendo will do what Nintendoes regardless of your discussion. So go ahead and discuss nonsense while Nintendo stays in business and I play the good video games that they release."

Feel free to deactivate your account, stop posting, and do something meaningful with your life since in your words all discussion here is worthless. I mean, I don't know why you continue to troll me. I assure you that Nintendo convincing me to buy the NX will be alot easier than them convincing the 85 million people who bought a Wii and didn't buy a Wii U to buy one. I also assure you that Nintendo management is not happy with the way the Wii U worked out and will try something different. Whether it goes my way or not hasn't really been decided yet and at no time did I argue I had any decision making authority.

@Project_Dolphin

"The difference, however, is that you're also talking about how you're unhappy with Nintendo's value and how Nintendo is not an "enhanced Nintendo" and how Nintendo don't make enough "core games".

That's one of my points yes. Profit and success are driven by value and how the marketplace views the product, so again, I don't think my views are necessarily irrelevant to this topic. There are like 4-5 articles going on right now and I'd say approximately 50% of them are talking about what they want out of the NX or how they are dissapointed with the delay or whatever. So why aren't you copying and pasting your reply that their opinions don't matter and Nintendo will do what Nintendoes on all of those opinions? What makes me special enough to earn your wrath?

"You want to talk about finances? If you want to talk about how Nintendo's finances strictly speaking, then only one thing matters: Nintendo making a profit."

You know that's not true. Faltering sales are why franchises are shuttered for generations or permanently. It's certainly why we haven't seen an Fzero or Waverace recently and Nintendo has said as much. Faltering sales of the Wii U means, they aren't going treat the next console the same and maybe it'll be drastically different. I've enjoyed my Wii U (while being disapointed that it wasn't as good as past consoles) and I'm glad you are enjoying Nintendo games. But all bets are off whether the NX will be the right console for me or that it will bring you the same level of joy you've had on past consoles. Nintendo changes, as you've said yourself. Some of those changes are welcome and some aren't. I'm not going to apologize for expecting greater things from Nintendo.

@Project_Dolphin

Nintendo's 2015 annual report is 51 pages long with lots of numbers and analysis. No offense, but as someone who looks at financial statements often, stick to your marketing.

"I've like most of Nintendo's video games, so you don't have to worry about that."

Most, not all? Hmmm........ that's how things started for me.

800,000 seems low, even considering the circumstances. NX must be getting enough high-profile Wii U ports to make the U redundant.

@Project_Dolphin

I really don't have time to teach you how to use financials advantageously. Generally the most important number is from cash flow. Yes, profitable companies can go bankrupt if they aren't generating positive cash flow and there are many examples of this happening. Lucky for you, it's positive for Nintendo this year, although it is down almost 250 million yen over a 5 year period.

Targets are also extremely important. You need to have a plan on where you want to be financially and how to get there. Now this one is somewhat troubling for Nintendo as their sales have been declining for something like 7 years since the Wii stopped selling.

Profits are important but operating profits have been negative over a 4 year time so there is obviously a big concern over whether the next generation for Nintendo will be profitable.

Here's a link to get you started from a simple google search.

https://www.americanexpress.com/us/small-business/openforum/articles/the-7-financial-numbers-every-business-owner-should-know/

These aren't an end all be all as that would take much more time. These also focus on small businesses, so they don't really break down how to look at multiple product lines which are also very important to Nintendo. Businesses just aren't willing to subsidize non-profitable activities because they make money overall. They are after all trying to maximize profit, not just make a profit..

"Okay. That's not relevant to what we're talking about, unless you're irrationaly claiming that we have the same taste in video games."

We are both Nintendo fans. I'd venture there is quite a bit of overlap.

Id imagine some of those 8000 Wii Us are people buying consoles as they break theirs ? I don't see any reason to buy one if you haven't already. I list 4 games coming to the machine and none of them are AAA titles. I got mine day 1 (big mistake) and I have had a fair run at all the games for it. But I don't see how someone without a Wii U is (FOR EXAMPLE) going to wake up a year after Splatoon's release and suddenly want to play it and buy a console.

It also has never seen a price drop apart from Store promotions. You can get a PS4 with a game for £250 yet the Wii U at best is £199-£189.

It has been a disaster of a console. Some of the games have been great, but the console itself has been awful. By that I mean the machine itself has done nothing to complement or improve the game design. Apart from Mario Maker. Although I think a companion app on an ipad could easily handle the job of the game pad there.

I love Nintendo, but I am at the bitter annoyed stage now. I feel like I have to wait close to a year to get anything new to play. That is insane. eshop games don't count in my eyes either.

Mario and Sonic at the Olympic Games
Lego Star Wars
Paper Mario
Tokyo Mirage Sessions

That's it, and all but one is being release before August. The only one I will play is Lego Star Wars and I will play that on PS4.

SAD times

15 million, unrealistic.
10-11 million, possible. It depends on whether NX is backward compatible.
Based off the heat Sony has faced and Microsoft's own switch, the likelihood is high.
800,000 systems, realistic, if Japan keeps support.
550,000 systems, likely, if Japan follows the EU lead.
Expect a price cut, possibly of 100$ USD, as early as September 1st.
(My supply company has the MK8 bundle as being 'Set to release August 19, 2016' with a 'SRP 199.96' in Canada)

Now, zZelda is the only PLAYABLE demo at E3, but won't be the only game at E3. I get the impression Nintendo may have 1 or 2 Wii U games that have gone unannounced and we'll likely see those there.

@Project_Dolphin

The primary goal of a business is to maximize profits. The primary goal of financial information is to provide useful information to decision makers.

You can't simplify it the way you want because the financials tell a story about the business and that story to me is worth discussing.

Nintendo's shares are down almost 10% today so I guess I'm not the only one who thought the financials didn't tell a great story.

Here is an article on how profitable companies can go out of business if you're interested.

http://www.eznumbers.com/blog/ten-ways-profitable-companies-go-out-of-business-everyday.html

@Project_Dolphin

Think about stats from professional sports. Yes, wins are the ultimate goals of every organization, but individual achievements can be tracked and trends can be analyzed and important information can be derived from an organizations successes and failures. This is predictive information whether or not that predictive quality is 100%.

The things I'm saying are different in subtle but important ways. For one thing, how Nintendo makes their money is important and how well they do over time is important.

For instance, in the last couple of few years Nintendo has been accelerating expenses on hardware because it has been selling at a loss. What this means is their profit in 2016 was inflated because of this accelerated loss the "true" profit is actually less than stated. That makes their current numbers more disappointing than they actually are.

"Nintendo has lost money only twice in their history."

Typically operating income is the best way to analyze a companies performance as this excludes unusual items such as currency fluction. In this regards, this comment is very false and misleading.
Nintendo had operating losses in 2012, 2013, and 2014 and a cumulative loss of 63 billion yen over the 2012-2016 time period. So over the life of the Wii U Nintendo lost money and has lost money in 3 of the last five years. You can spin that as a few years out of more than 100, but when when they've cumulative lost money over the last 5 years that is a big deal.

I get that you think investors are dumb and some may be. But they should be taking into account mobile and NX plans. If they are getting out now, they don't have as much hope that Nintendo has the right plans to get out of their funk. Can you blame them though? Nintendo had an operating income of 356 billion yen in 2010.

@Project_Dolphin

I didn't ever say Nintendo was going bankrupt. I said they are clearly in a period of change and how they will change is unknown. And I have in fact proven that they had an operating loss over the last 5 years. It's in their financials, but don't let that get in your way.

Okay, so let me see if I understand your points.

#1 Sales don't matter.
#2 Losing money over a generation doesn't matter.
#3 It isn't important to understand how a company makes money.
#4 It isn't important to understand the accounting adjustments to earnings.
#5 It isn't important to hear management's take on their financial results.
#6 Profit in one year means that Nintendo will keep producing consoles and games that you like indefinitely.
#7 Financial results below targets don't matter. In fact, targets don't matter.
#8 Cash Flows don't matter.
#9 Balance Sheets don't matter.
#10 New company leadership doesn't matter.
#11 It doesn't matter if product lines are profitable.
#12 It doesn't matter if operating results are negative.
#13 ROI doesn't matter, a profit of $1 is as good as a profit of $1,000,000 since only generating a profit matters.

Did I get all the things that you said don't matter that I say? I obviously think all those points are ridiculous and irrational so it's pointless to continue this conversation.

@Project_Dolphin

As an aside, I love your method of arguing. First I can't talk about anything within the financials on an article about financials, then you say you definitely win the argument if I can't prove that Nintendo is going bankrupt although that's never what we were talking about. Keep up the rational thoughts man.

@Project_Dolphin

Stop being lazy. Nintendo's financials are available to you. FYI, they did lose money from a net income perspective over the 5 years I talked about. That was never my point though, Nintendo's financials are poor regardless if they aren't losing boatloads of money. And FYI, operating income is way more important than net income because that is your core business and if you can't make money off your core business, you need to change what you are doing.

My turn, prove to me that sales don't matter to companies.

@Project_Dolphin

"Not even $180 million U.S. since 2012"

So profits are everything and you admit they are losing money. Glad that we can agree their financials are bad. Next time just jump to that point.

@Project_Dolphin

You ask me to prove something I never argued. Also, you said you weren't interested in providing projections and now you say profit doesn't matter because Nintendo will make lots of money in the future.

Please stop contradicting yourself. Is profit everything or is it nothing as you are now arguing?

Do you want to project into the future or is it a waste of time as you indicated earlier?

Why don't you research Nintendo's financials and let me know if I've said something you disagree with. Asking me to prove things we haven't talked about doesn't count.

@Project_Dolphin

I don't have to prove those because I never said those things were true or were they part of my argument.

@Project_Dolphin

I didn't have those doubts. Feel free to reread my posts and then respond to them.