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Wednesday, October 24, 2012
Nintendo Revises Profit Outlook Ahead of Wii U Launch

Nintendo has revised its annual profit outlook Wednesday by almost one-half as diminished console sales weighed on earnings. The company now hopes that the launch of Wii U console will reboot earnings growth.

For the year to March 31, the Japanese company lowered its operating profit forecast to 20 billion yen ($251 million)from a 35 billion yen forecast in July.

Its operating loss for the three months to September 30 edged down to 18.8 billion yen from a loss of 19.6 billion yen a year ago.

Nintendo will release the new Wii U in the United States on November 18. The new device boasts a tablet-like touch screen controller and a social network, and lets users record TV shows through TiVo and other digital recording services.

Nintendo expects to sell 5.5 million Wii U machines by March 31.

During the six months ended September 30, 2012, for the Nintendo 3DS hardware, Nintendo 3DS XL, with screens approximately 1.9 times larger than those of Nintendo 3DS, was launched as a new size variation of Nintendo 3DS in Japan and Europe in July, and in the U.S. in August. Nintendo said the worldwide hardware sales of the Nintendo 3DS series were 5.06 million units. As for the Nintendo 3DS software, a side-scrolling 2D action title, New Super Mario Bros. 2, was released in both packaged and downloadable formats, and marked a total of over three million units in sales.

In addition, Nintendo's evergreen titles, such as SUPER MARIO 3D LAND and Mario Kart 7 released last fiscal year, kept selling well, and there were some hit software titles from the third-party developers. With significant contributions from these titles, the Nintendo 3DS software sales were 19.03 million units.

Regarding the Nintendo DS series (DS, DS Lite, DSi and DSi XL), the latest title from the Pokemon series, Pokemon Black Version 2/Pokemon White Version 2, released in Japan in June, and in the U.S. and Europe in October, reached a total of 4.26 million units in sales. However, the worldwide sales of Nintendo DS series hardware and software only reached 0.98 and 17.3 million units respectively due to an accelerated generational change to Nintendo 3DS in the handheld device segment.

With respect to the Wii system, although Mario Party 9, the latest title in the Mario Party series, sold over one million units, the Wii hardware and software sales were 1.32 and 23.74 million units respectively, mainly due to few new title releases.

"Affected by the appreciation of the yen and the above results, among other factors, net sales were 200.9 billion yen (of which overseas sales were 127.1 billion yen or 63.3% of the total sales)," Nintendo said. "Due to factors such as the case that the Wii U hardware, which started to be manufactured in this September quarter, will have a negative impact on Nintendo's profits, the operating loss was 29.1 billion yen," the company added.

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