Nintendo enhances expected loss; 15 million 3DS units sold since launch

by Alexander Sliwinski on Jan 26th 2012 8:30AM

Nintendo has once again revised its expected loss for the fiscal year ending in March, widening its forecasted financial misfortune from ¥20 billion ($258M) to ¥65 billion ($839M). The increased loss comes a quarter after Nintendo switched its forecast from a ¥20 billion profit to loss.

For the first nine months of the fiscal year ending December 31, Nintendo had sales of ¥556 billion ($7.2B), a 31 percent decrease from the same period last year. Overall, it posted a loss of ¥48.4 billion ($620M).

"Nintendo 3DS hardware during the nine months ended December 31, 2011, were 11.43 million units, and the total worldwide sales since its launch exceeded 15 million units," the company stated. Both Super Mario 3D Land and Mario Kart 7 have gone on to become million-selling titles.

The company also mentioned that The Legend of Zelda: Skyward Sword for Wii recorded "strong sales, especially in the United States." Worldwide Wii sales over the nine-month period hit 8.96 million units, with software selling 89 million units.

Nintendo's financial woes, coupled with mobile gaming's increased portion of the handheld market, are not sitting well with investors. The House of Mario continues to see its stock sitting at a five-year low.

Source: Nintendo

Tags: 3ds, ds, financial, financials, nintendo, Q3, wii, wii-u

Reader Comments (57)

Looks better then what they initially forecasted. So win-lose.

@jph89

Whoops read that wrong. Thought it went from 65 to 20 billion loss. How did they lose so much money? Strong 3DS sales and best software sales in years. Really not good news if they aren't making money when on top.

@jph89

Pretty clear why. They used to get money on strong Wii hardware sales/DS and a good amount of software. The DS and Wii a few years ago had a lot of strong software, but now the Wii is in it's dying stages and barely had more than 1 game to get last year. The DS hasn't seen anything great since Pokemon White/Black. So...that's why really.

@jph89

Well their "loss" isn't really a loss, it's just their projections didn't meet their expectations. When that happens, investors get sad. Projections were probably based on previous Q3's.

@Punkrawk Bbob
Overall, it posted a loss of ¥48.4 billion ($620M). I'd call losing money a loss, this isn't just a dropping stock price. We'll see how next year goes though, this is gonna be a little tricky for Nintendo because it's a new business model for them. With the DS and the Wii, Nintendo made money on hardware sales, but the 3DS is subsidized by them since the price drop, so they need to make up for it with stronger hardware sales.

@Milak sorry, meant they had to make up for it with stronger *software* sales, this is why we need an edit button.

@Startbuttonnews
Wii software sales are pretty good!....

.....in Japan, the smallest by some way of the three main markets. (And only by comparison with other platforms.)

They're actually not bad elsewhere either (Just Dance, Zumba Fitness). But the hardware sales have fallen off a cliff. Everyone who wanted a Wii has already got one.

As for how they're losing more money than expected, maybe the 3DS sold better than expected post price-cut.

Basically Nintendo are currently losing money but doing absolutely as well as ever in handheld market; 3DS is looking great for them. As for Wii U it looks to be a really good system but my guess is they'll mostly be back in the gaming market - the 'casual' market has largely moved on. They'll give it a try, of course. But I don't see it being anywhere near Wii levels of success, even though the system will be technically excellent and (unlike 3DS) the system's main gimmick is probably actually going to make for better games and useful control methods, too.

After selling 15 million units and staying on top of the market every week in Japanese market sales it is still a Lose? =\

@Spartan050

You can't be strong with only one market in your corner though. I don't think they're doing nearly as well in Europe and the Americas.

@Shockwave No, it really is doing really well outside of Japan too.

What people seem to be forgetting is that the 3DS had the price cut. This means Nintendo isn't getting the profits they wanted meaning they are losing money. It's simple maths

@Serebii

Simple "maths" also would show that the Wii alone wouldn't have possibly 839 million dollars in debt. The 3DS can't be doing that well and still have contributed to such a big loss. I could be wrong, but these losses aren't just from when the 3DS was young. This includes 4th quarter of 2011.

@Shockwave
The 3DS currently sits at roughly:
NA: 5.24M
EU: 4.17M
JP: 4.66M
Rest of the world: 1.25M
Total: 15.32M
(source: http://www.vgchartz.com/analysis/platform_totals/ .... so take the numbers with grain of salt; but even Nintendo has stated over 15M have been sold worldwide)

The 3DS has yet to be on sale for a full calendar year, and it has already outsold the original DS's first year (14.43M). Which given that it has to compete with the established DS/DSi and PSP as well as smartphone games (though, I personally do not see that as competition, as it's just a completely different kind of market), I'd say that the 3DS is doing fine.

Their profit forecast likely reflects expectations of sale at the original price tag.

They also forget to mention that the Tohoku earthquake last year dealt a major blow to the industry - and that it's still trying to recover. Total software sales last year pretty much show that the entire industry fell - and fell hard.

Well have to see if this is just a hiccup, or that Nintendo needs to do something fundamentally different to spur sales.

@Kagiroi They don't need to. The 3DS has consistently been the best selling thing in Japan for months and not so consistently at the top but still doing near the best constantly elsewhere.

@Kagiroi Can't blame everything on the earthquake... 'Tendo aint selling wii's like that anymore. On top of that, they over-priced their 3DS out the gate and Software wise, they took a huge drop in sales.

I can see them taking a bigger drop when the Wii U drops and doesn't sell. You think Sony and MSFT won't drop the price even further on their consoles to counter the release of the Wii U? And the fact that you can only use ONE tablet controller per console? I Expect 'Tendo to lose even MORE money.

Ah christ, I *knew* I should've bought EA instead of Nintendo. Their stock is around double what I would have paid for it.

There is no place in the market for nostalgic goodwill...

@baby sea tuna I think you should probably wait it out. People have counted the big N down and out before, and they've been wrong most of the time. I honestly wonder if they'll just keep on this boom-bust cycle they've been going on since the Nintendo 64.

This is the result of the "Cammie Dunaway" era of targeting the "casuals" and also having that ivory tower mentality to their hardware. They were not working closely with the third parties and this is what happens.

On the plus side Wii-U looks like it will change all of this! So I have high hopes for Nintendo in 2012

@Ahriman

"This is the result of the "Cammie Dunaway" era of targeting the "casuals" and also having that ivory tower mentality to their hardware. "

First off, Cammie Dunaway had nothing to do with the direction Nintendo took the Wii or Ds.

Second, by targeting "casuals" (so everybody that is not an angry teenage boy I guess?) made them filthy f-ing rich.

The are a few reason they lost money on the 3DS and moving away from the strategy that made them rich with the Wii/Ds is one of them.

And if they move away from that strategy with the Wii U it will lose money too.

@Ahriman
What WiiU are you looking at?

@TwEE

Yes, I know that but she was VP for marketing so although she didn't drive the direction they took, she was the outward facing picture of how Nintendo wanted to be seen.

Your angry teenage boy definition is why I put the word in quotes. Targeting a broader audience worked well but there was no reason to do it at the expense of AAA third party titles or making sure games like skyward sword were released well before they were. Wii was always crying out for a new Star fox title, a luigi's mansion title or something like that.

I don't really know why you are arguing the point, since the 2011 E3 conference shows you that they realise they were mistaken and are now trying to claw back that market that they threw away needlessly.

Wii-U will be the best of both worlds.

@Vic Fontaine

The Wii-U will :-

Be the first new generation console out of the gate and if rumors are to believed only marginally less powerful than the other contenders.

Allow Nintendo to combine their first party prowess with the HD era, provide stronger online features and true third party collaboration like in the SNES days.

Still retain the broader audience it has acquired through Wii-U and coax both types players with the ability to play a game running on the console remotely with the Wii-U pad.

@Ahriman
the wii had a great novelty and uniqueness, that well, the wii U doesn't. Casuals already have their touch screen gaming via their ds's, 3ds, iphone, ipads, etc.

I don't see them jumping on this just for the tablet.

As for the more hardcore, they will migrate towards the systems with more power and better online systems.

@Ahriman Uh, that market LEFT Nintendo, not the other way around. Gamecube had some of the best games of that gen directed squarely at the hardcore and it flopped as far as market/mind share went. Doing that AGAIN is the definition of insane, so they went back to what made them a household name in the first place. Get their box into everyone's homes making it a must have purchase. Nearly 100 million units later, mission accomplished there.

Losses are typical during any hardware transition cycle. It's why most companies want to stretch out the "fat" years as long as possible, ie Sony's ten year strategy and MS holding strong with the 360. Note when MS shortcircuited the last hardware cycle it was because they had terrible terms on the original Xbox production (so staying in that gen wasn't making them money), and it still ended up costing them billions this gen.

All to say, recouping the costs of producing the 3DS and developing the WiiU were probably going to eat into Nintendo's earnings regardless. Or MORE likely, 1.1 billion US is probably what Nintendo lost from their initial projections with the 3DS price drop and Ambassador program across 15 million 3DS units sold.

@mrantimatter Online definitely, power not so much. Otherwise the PS2 and to a lesser degree 360 wouldn't have been the successes they were...let alone the Wii.

In this era of multiplat, unless some company creates the new paradigm and establishes PS era hegemony, being simply somewhat more powerful will ultimately be largely wasted endeavor. And no one is going to try to sell something twice the price of their competitor or eat that loss to make something actually much more powerful.

Their forecast was off by 20 billion yen two quarters in a row? Sounds like Nintindo needs some new bean counters.

@Brando Calrissian Depends on when the forecasts were made I guess and what corporate maneuverings are responsible. Such as rising WiiU dev costs, or the 3DS price drop, etc.

Wasn't this expected? Aren't they still recovering from the first half of the 3DS life?

@TwEE
Well, it helps that they have two million-sellers under their belt - both of which accomplished that in the span of two months.

But the fact that they're apparently now selling the 3DS at a loss doesn't help matters at all.

Proof that once you get the games out, people will buy your stuff. Sony needs to follow suit or experience similar growing pains.

@mrantimatter I hope you realize what you typed literally makes 0 sense and makes you come off as a moron.

Nintendo looses profits and tank hardcore "Sony should follow suit nintendo is a good example!" is the stupidest advice.

@Sift
I was referring to sales. 3ds wasn't selling till Nintendo got some heavy hitters out. The PSV isn't selling well in japan for the same reason.

The 3DS is still selling like hotcakes. They just need to get past the losses taken by the price cut.

Seems like this would be part of the normal cycle. Spend a ton of money to get new systems going, then pull in the profits until you have to start the next generation.

So, exactly the same as what happened to the DS and several other major consoles.

Good to know that this trend is still worth reporting.

Cue the Price is Right failure jingle

@2Slick "Bum-bum-ba-bum WAHHHHHHHHH"

I think 3DS will do well for them over the next year, but I can't help but feel that the Wii U won't exactly have the bombastic launch that the Wii did, and I'm afraid that's what Nintendo expects.

@CoconutSkittle
I think that was obvious from their e3 presentation. Little no no one was hyped for it outside some fanboys online and in the media. compare that to the reaction the wii's motion controls got, which had everyone dreaming about possibilities.

Hence their info blackout for the last half a year, with little to no attempts to build hype.

I don't know how much it reflects the overall market, but I haven't seen any of my friends or family buy a new portable game much less a portable system since they got an iphone/android phone.

Nintendo need to fall back and go back to Core Gameplay with a Core controller (see Gamecube) and stop trying to feed us gimmicks to sell consoles.. (see Wii, 3DS and now Wii U)

Vitality Sensor anyone?

@StarcasM Gamecube being the worst selling console of that generation.

Wii being the best selling console of this generation
Nintendo DS being the best selling handheld. 3DS beating its first year sales

Yeah, I can see your logic...

@StarcasM
1. Self-proclaimed "hardcore gamerz" hated the GameCube controller because it wasn't of a "standard" layout (the over-sized A button, the bean-shaped Y and X buttons, 3 shoulder buttons, the smallish C stick). And the Nintendo severely lagged behind PS2, and was outsold by Xbox, globally, by a couple of million units.

2. The Vitality Sensor hasn't been seen again since it was announced. For all we know, that project is dead.

3. Wii still has the Classic Controller (Pro), so it wasn't like the motion-sensing/pointing Wii Remote was the only input method for it. Nor are gimmicks necessarily a bad thing, either. It's something unique to help set it apart from the others.

@Serebii can't wait for the Wii U to drop.. Can't wait to see it in huge mountains on sale like the Atari Jaguar 6 months from then. That thing is made to go the way of the 3-D boy or whatever that oversized gameboy was called.

The key to nintendo's success from here on out is simple. They need to keep innovating, but also support the core old school controls with everything that means motion controls and standard controls, keep up with technical specs of competitors, aggressively pursue third parties to support their console with the blockbuster games making sales for sony and microsoft (Batman, assassin's creed, resident evil, 90% of the popular fighting games, etc.), and lastly embrace what made them great in the 80's and 90's. Donkey Kong Country returns and new super mario bros are a business model for success.

You know what? It's hard to feel bad for Nintendo in this situation. They consistently have proven this generation of consoles that their bottom line is far more important than the gaming experience, and as such, everyone in the gaming community has turned their back on them. And now with the flop of the 3DS and the weak reception to the Wii U, it's showing just how much Nintendo's success last generation actually was successful.

I've been the leader of the "going the way of Sega" camp the last few years, and I maintain it's going to happen a lot sooner than people think. I don't care how profitable a company has been in the past, you just don't weather a 1 billion dollar loss, especially considering Nintendo isn't as big as people think. And you know what? if Nintendo did go third party, I'd celebrate. Good riddance to the company that has held the industry back for the past 10 years

@MeAndTheFanboy

I could take apart your post point by point and verbally humiliate you, but why bother? I'll just say that I think your opinion is dumb. Really dumb.

@A Sandwich

Your profile pic makes me hungry.

...FernandoRocker? Where are you? ...

Well, if he won't...

DOOOOOOOOOOMED!!!

@AxelSteelBMX
You know what's more annoying than when Fernando makes those posts? When people give him attention over it like this.

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Nintendo enhances expected loss; 15 million 3DS units sold since launch

Reader Comments (57)

Posted: Jan 26th 2012 8:38AM jph89 said

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Posted: Jan 26th 2012 10:28AM Punkrawk Bbob said

Posted: Jan 26th 2012 12:31PM Milak said

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Posted: Jan 26th 2012 8:50AM baby sea tuna said

Posted: Jan 26th 2012 8:58AM Darklink2009 said

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Posted: Jan 26th 2012 9:15AM TwEE said

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Posted: Jan 26th 2012 12:26PM houser said

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Posted: Jan 26th 2012 9:02AM Brando Calrissian said

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Posted: Jan 26th 2012 9:17AM TwEE said

Posted: Jan 26th 2012 10:52AM Shadow Hog said

Posted: Jan 26th 2012 9:23AM mrantimatter said

Posted: Jan 26th 2012 11:18AM Sift said

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Posted: Jan 26th 2012 10:52AM AxelSteelBMX said

Posted: Jan 26th 2012 10:25AM CoconutSkittle said

Posted: Jan 26th 2012 12:19PM mrantimatter said

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Posted: Jan 26th 2012 11:07AM StarcasM said

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