As expected Nintendo has begun the roll-out of its financial reports, so far in the form of the formal documentation outlining sales and profit margins. In the coming days we should see manuscripts of President Tatsumi Kimishima's presentation and an investor Q & A. For now, however, we have a set of results that shows the company on a Switch and Pokémon-led return to more solid profits.
Overall Nintendo has beaten its own previous projections for the 2016 / 2017 financial year, reporting higher than expected figures for net sales, operating profit and ordinary profit. The operating profit increase - truly the core figure reflecting the company's current levels of success - is attributed to the projections-busting Nintendo Switch sales, with the big N citing high sales and lower-than-expected marketing costs as a result of the natural demand for the system.
So, let's get to the nuts and bolts of the financial figures, covering 1st April 2016 to 31st March 2017 - we have a sizeable net income profit of 102,574 million Yen, which amounts to around $920 million / £715 million / €840 million, up 521.5% on the previous year. That may seem extraordinary, but to be clear there are external and one-time factors bloating that figure - Nintendo's share of Pokémon GO's monster profits are a factor, and more tellingly the company's one-off sale of its majority stake in the Seattle Mariners baseball team. So while that profit figure is terrific news for Nintendo its sheer size doesn't reflect the realities of its day-to-day business, even though the company is doing well.
More importantly, perhaps, net sales beat previous estimates, with the Switch credited for its role. Net sales were still down overall, with the 3DS doing reasonably but the Wii U largely flatlining, coming in 3% below the previous year's results.
The core business of making and selling products also brought a better-than-expected operating profit of 29,362 million Yen (it had been previously projected at 20,000 million Yen), which is roughly $264 million / £205 million / €242 million; despite beating Nintendo's own projection this was still down 10.7% on the previous year.
The financial report says the following regarding these figures, providing sales updates on key releases:
Nintendo Switch, a new home console system that diversifies the ways you can play games, launched during this period on March 3 worldwide and is off to a promising start. In particular, The Legend of Zelda: Breath of the Wild has won immense popularity with recorded sales of 2.76 million units (the total units sold including the Wii U version is 3.84 million units) and 1-2-Switch has been generating buzz. Both of these games were released at the same time as the hardware. The sales volume for hardware and software during this period reached 2.74 million units and 5.46 million units respectively.
Sales volume for the Nintendo 3DS software also grew favorably. In addition to Pokémon Sun and Pokémon Moon, which released worldwide in November and generated a tremendous amount of buzz with recorded sales of 15.44 million units, Super Mario Maker for Nintendo 3DS sold 2.34 million units and Kirby: Planet Robobot sold 1.36 million units. The release of the smart device application Pokémon GO led to increased sales of software in the Pokémon series and drove the Nintendo 3DS family hardware sales growth outside of Japan. The worldwide sales volume for the Nintendo 3DS hardware this period was 7.27 million units (7% increase on a year-on-year basis), while the Nintendo 3DS software sales volume reached 55.08 million units (14% increase on a year-on-year basis).
For Wii U, while The Legend of Zelda: Breath of the Wild released worldwide in March and reached sales of 1.08 million units, the Wii U software sales volume during this period was 14.8 million units (46% decrease on a year-on-year basis) and hardware sales were in alignment with our expectations at the start of the fiscal year, decreasing to a sales volume of 760 thousand units (77% decrease on a year-on-year basis).
On the smart device front, we released Super Mario Run, a new action game application featuring Mario, in December for the iOS and March for the Android. This title elicited a fantastic response from consumers worldwide. Furthermore, we released Fire Emblem Heroes, a full-fledged simulation RPG game application that can be enjoyed casually on smart devices, in February. The game is being enjoyed by both long-time fans of the Fire Emblem series and consumers who have never played the series on dedicated video game systems.
The Nintendo Entertainment System: NES Classic Edition also launched in Japan and overseas in November to widespread popularity. Although the release of some new titles offering amiibo functionality restored some momentum, amiibo sales remained limited to 9.1 million units for figure-type and 9.3 million units for card-type. In addition, there were relatively fewer offerings of downloadable content during this period, so digital sales were also down to a large extent on the same period last year.
In terms of the coming year — 1st April 2017 to 31st March 2018 — Nintendo estimates improvements in profits. Net sales is the big gain, projected at 750,000 million Yen, a hefty 53.3% increase that would take the company's sales back towards the levels enjoyed in the late Wii / DS period. That's evidently driven by a combination of Switch success, ongoing 3DS momentum and potentially surprises yet to be revealed. Operating profit (which reflects the core success of making and selling products) is also expected to jump by 121.4%, with a projection of 65,000 million Yen. The only number to drop is the total profit, down 56.1%; as highlighted above this will be due to the last year's figures being heavily inflated by income such as the Seattle Mariners sale.
Moving on to hardware and software sales, as previously reported Nintendo beat its original Switch system projections and also had a solid year with the 3DS. Wii U sales were low as expected, and due to the system's discontinuation Nintendo doesn't expect to ship any of the consoles in the coming financial year.
Figures are below.
Nintendo Switch
Hardware Sales (financial year) — 2.74 million units
Hardware Sales (life to date) — 2.74 million units
Hardware Sales Projection (2017 to 2018) — 10 million units
Software Sales (financial year) — 5.46 million units
Software Sales Projection (2017 to 2018) — 35 million units
3DS
Hardware Sales (financial year) — 7.27 million units
Hardware Sales (life to date) — 66.12 million units
Hardware Sales Projection (2017 to 2018) — 6 million units
Software Sales (financial year) — 55.08 million units
Software Sales Projection (2017 to 2018) — 40 million units
Wii U
Hardware Sales (financial year) — 760,000 units
Hardware Sales (life to date) — 13.56 million units
Hardware Sales Projection (2017 to 2018) — not applicable (discontinued)
Software Sales (financial year) — 14.8 million units
Software Sales Projection (2017 to 2018) — 3 million units
Those are decent projections for the 3DS, we'd suggest, and the fact that more 3DS games are expected to sell than the equivalent Switch figure indicates that Nintendo has plans to boost that area. For its first full year the Switch estimates also seem solid (remember software is relative to a growing userbase), though Nintendo's estimate of shipping 10 million hardware units is relatively conservative in comparison to figures thrown around by analysts in recent weeks.
We'll provide more detailed coverage throughout the day, but let us know what you think of these figures in the comments below. Are you optimistic for the year ahead?
[source nintendo.co.jp]
Comments 44
I'll echo what I said in the Switch article comments; its nice to see Nintendo doing well again.
Now that the WiiU is officially dead lets put those years behind us and hope that this is the first of many successful financial reports from Ninty.
So ..... sounds like they have not given up on the 3DS with that projection.
But saying that the Wii U will still sell 3 million games, even though the hardware is "Discontinued" hmmm, thats optimistic Nintendo.
@Bunkerneath Yeah, Pokemon Stars if real must be coming to 3DS!
It's great to read some positive results for Nintendo finally.Positive news spreads,which in turn leads to 3rd party confidence,more games arriving,more sales and so on.The Wii U had nothing but negativity surrounding it from day one.Providing they can keep the big games coming at a steady rate this year and beyond I can't see Switch being anything other than a big success.
Rest in peace Wii U....
Let the Switch take over.
Sure, Switch is the PhoeniX of Nintendo.
"The Nintendo Entertainment System: NES Classic Edition also launched in Japan and overseas in November to widespread popularity."
@SLIGEACH_EIRE As long as they don't repeat it with the better and more important SNES mini. Produce 30 times as many! Hell that's only 6mil for the original shipment, produce 50 times instead!
I'm really interested in seeing how much consumer demand remains by August/September
"Wii U
Hardware Sales Projection (2017 to 2018) — not applicable (discontinued)"
Glad I got my unopened Xenoblade Wii U console.
Wii U will live on in my house!
Too many great games on my backlog.
"1-2 Switch has been generrating buzz" is corporate PR speak for "has sold badly".
Very good for Nintendo. Better than I expected but still a lot of work to do to maintain this initial success.
E3 is now the big focal point.
The big question: Are the third parties really interested in the Switch to put their A list games on it? Not ports from years past (like Skyrim) or their Z games.
Will the ones that do support it with AAA (if any) do it consistently?
Some people love the WiiU but using it recently I now really see how sluggish the OS is compared to the Switch. Come to think of it, even the Wii was faster.
Hopefully I can pick up some more bargain basement software for the WiiU second hand but being in the UK, they weren't that many WiiUs to start with. However sometimes a game does show up for less than £5.
@Julien
I will bet that 1-2 Switch will be packed in come Christmas, at the very latest within a year.
Good for you nintendo now invest in games.
Really wish Iwata was still about, to see how his vision for the Switch has turned Nintendo's fortunes around.
@Hotfusion Yep, as ultimately it's a glorified tech demo. I bought 1-2 Switch to experience HD Rumble, only to discover I'd need to play though a load of filler to unlock those two games. So gave up and went back to BotW.
Definitely my biggest dose of Videogame Buyers Remorse since paying full price for Harry Potter and the Order of the Phoenix on Wii. (Avoided Wii Music and at least both Wii Play and FlingSmash came with "free" controllers.)
@Bunkerneath Selling 3 million games on Wii U for the next fiscal year should be pretty easy as there's still tons of software in distribution that has to sell through yet.
@Julien 1-2 Switch is still charting pretty well in Japan. I'm sure that Nintendo is pretty happy with it's sales at this point.
Time to cram all these profits into this year's E3 lineup, boys.
@Amsterdamsters Why don't they share the sales numbers then?
The game has no soul and looks like it's been made by marketing people at Microsoft. The casual crowd didn't know the Wii U existed so why not use Miis, a la Wii Sports? Or Wario?
But interesting that it's still charting pretty well in Japan. Perhaps pretending to be that fat American bloke milking a cow is the latest cosplay sensation?
1-2 Switch will also eventually be $20 and/or bundled with the system, so it is just getting started.
@Julien My son bought the game and took it and his Switch over to a friends house where a bunch of his friends had gotten together. He said at first there wasn't too much interest in him setting it up on the TV, so he just went ahead and did it anyway. In the end they spent over two hours "having a blast" with it. I've played the game, I can see how it would be a lot of fun in a room with lots of people participating...one or two people, not as much. It is a party game after all.
gj Nintendo! now let's hope this continues well for the Switch and the 3DS.
Great! Let's hope Nintendo keeps momentum up, since that means we could get even more games on the Switch.
@Freek I got the Xenoblade Wii U console too 5 months before the switch got released. Still don't regret it. I ll get switch next Xmas with Mario Odyssey. In the meantime i ll build my Wii U game library
1-2 Switch! works in a group. Just look at how people react online. It stirs people up in person, too. Some people will stare on thinking "so stupid" and laugh and enjoy their friends doing stupid stuff and maybe never try it, but in the end they'll have to admit that a group of people had fun with the game.
I don't think it's unreasonable for dedicated gamers to be wary of it, though. It's a different kind of gaming and it's natural to want all sorts of experiences from the versatile Switch.
Honestly, though, that seems like it will be the biggest selling point for Switch over time. Versatility. So, might as well accept the "buzz" as a positive thing for everyone. Dedicated gamers can be glad that the MOST successful game is Breath of the Wild.
And because share holders are generally visionless idiots Nintendo's stock is down more than 3% even after all of that great news.
If they're only expecting Switch sales this year of 10 million, are they only going to produce 10 million? In which case, if they're wrong and it's more popular than they figure, we'll see stock shortages again in the holiday season. Missed opportunity if it plays out that way
@Julien LOL. Funny but it actually sold really well. That's one bullet point that does NOT make me happy here However keep in mind that it sold best in Japan, showing the land of Karaoke is still a lot more enthused about the group party game/self-embarrassment genre than the rest of the world.
@Anti-Matter Phoenix Wright for Switch confirmed?
@Bunkerneath I imagine the "3M games" for WiiU includes low cost e-shop downloads, not just boxed retail.
@RandomNerds Values almost always drop immediately after big announcements and earnings reports, because everybody that was looking for a specific result or the next big shock result (Wii) bails when they see it's not happening. But also, everyone who is pleased enough with the current gains to sell at a tidy profit does so then. Investors generally ARE idiots, but Nintendo's are pretty good, and a mere 3% shift actually shows only a very small number of shifts, 97% of investors are clinging on, keeping their hands and arms inside the vehicle, waiting for the ride to start .
I picked up 1-2 Switch mostly to have a game to play with my kids. It's ok for that, but when a big group of non-gamers was over my wife suggested we all play it. There wasn't much interest at first. 3 hours later we practically had to kick people out so we could put the kids to bed.
Sounds good so far! Excited. Still waiting until late summer for my switch though.
@NEStalgia You accidentally used profanity instead of "shifts" towards the end. xD
Just pointing that out, glad I noticed before changing the word completely. lol
The part about lower than expected marketing cost stoke out for me. Hopefully that encourages Nintendo to keep up what they been doing in terms of marketing. It obviously paid off.
@Joeynator3000 LOL, the curse of the killer typo! I think that almost happened in another thread one day and I caught it. Apparently my fingers gravitate away from the f key (which if funny because I never actually type the other word anywhere, so it's not force of habit, just pure unfortunate coincidence. )
At least I don't seem to have similar issues when typing Switch....I'd be banned in a day
Well you can tell this is positive article by the lack of comments. Anyway good job Nintendo!
So Nintendo projects another 10M, meanwhile Amazon gets a shipment of Switches, and 15 minutes later, all gone and back to scalpers.....
So that's "better" than NES Mini, right? Can we just accept the real street price of a Switch is $450 now?
@Ryu_Niiyama This time it's YOUR turn to make the comment that's supposed to be funny but is actually depressing
"In particular, The Legend of Zelda: Breath of the Wild has won immense popularity with recorded sales of 2.76 million units (the total units sold including the Wii U version is 3.84 million units)"
They said before it came out they needed to sell 2 million copies to start making a profit on Zelda. Looks like they've done that without much effort.
People like to look at the sales of Nintendo consoles, never mind that, look how many units of software they shift in a financial year...but yeah, doomed.
@WiltonRoots So true. The same goes for all 3 consoles. Everyone counts hardware sales, when hardware generally makes next to no money and for the other two especially actively loses money. They all rely on software, accessories, and royalties. And Nintendo certainly has the lead on that. The hardware exists simply to sell software. As long as they're selling software like that they're in great shape.
@NEStalgia I mean did that work out to 75 million units of software across the board in one financial year? That's quite impressive. Also impressive is 2.34 million units for Mario Maker on 3DS especially after it got slammed as pointless in here by some...
@Lysis You don't know that. Game and Wario never saw a price drop and Nintendo even said they considered making it built in like Face Raiders on 3DS. Maybe 1-2 Switch will stay $50 forever.
@NEStalgia ...Hmm, sorry about that. Been that kinda week. But it is sad; you would think on a fansite that people would be happy the company is doing well. I don't understand people. Maybe I should talk about Nintendo on Push Square...may get a more positive turn out.
@Fred13 True. It's just a guess that they'll either bundle it or reduce it to $20. If they don't do one or the other, I don't see it selling much more than it already has. I think that the only way it becomes a big seller in the long run is to bundle it or drop the price.
@Ryu_Niiyama oh come on, if you're gonna do it you've gotta go all the way. Talk nintendo on IGN and gamefaqs.
And if you decide you have no shreds of dignity and self worth to preserve, there's GAF and Hardforum.
@NEStalgia I like not elevating my blood pressure. At least the trolls here usually type out complete sentences. They don't make sense... but it is legible. Usually.
Nintendo really thinks three million people are going to buy Just Dance 2018 on Wii U? Wow, that game must be more popular than I thought.
@Ryu_Niiyama Haha! In some cases i would prefer it were in fact not legible
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