Report: Nintendo Bleeding Cash

Remember the days of Nintendo printing money? Those days are over, apparently. According to Japan's Nikkei, the Kyoto-based game maker is poised to post huge losses tomorrow.

Profits are supposedly down a staggering ¥100 billion ($1.3 billion), which is twice what Nintendo forecast.

The two major culprits are struggling hardware sales and the stubbornly strong Japanese yen. Nintendo makes 80 per cent of its profits from foreign sales, and lost a whopping ¥40 billion yen in foreign exchange. That's $US400 million gone right there—poof.

Many Japanese companies have recently been complaining about the strong Japanese yen, threatening to move production abroad. Nintendo, who does not manufacture hardware in Japan, shows just how painful the strong yen is even for those companies who have already moved their manufacturing offshore.

Nintendo declined to comment on the Nikkei report, and the company will disclose how it's doing tomorrow.

UPDATE 1-Nintendo H1 recurring loss seen at Y100 bln [Reuters]


Comments

    Yeah it makes importing stuff from japan a bitch too.

    i can see this happening, the last thing i saw from Nintendo that interested me as a long time gamer was galaxy, and even that is 1 game, not worth me buying a wii.. 3ds overpriced and STILL no decent games.. wiiu...lol.. bring back the gamecube :P

      nah they are taking gamecube backwards compatability out of the new wiis...

        The main reason I use my wii these days IS to play gamecube so I am very sad to hear about their new wii model

          mm thats not good, but it is an old console now, and the technology may be so SO different that its just not feasible, we don't really know, they might not have a choice. then again, it might be possible, and its just another fail for Nintendo :/ Either way, the only thing i care about from Nintendo is seeing some new fucking IPs, like srsly? more mario? its wayyyyyyyyy done, if anyone wants to play a good Mario game there are only a bazillion to choose from, why make more? oh right because PEOPLE KEEP BUYING THEM.

    If Nintendo was selling well, they'd still be pulling massive profits, regardless of the strength of their currency.

    Let's just hope this is a burning bush moment for them and they seriously reconsider their current business model. You NEED more co-operation with 3rd party devs, you NEED cheaper, downloadable titles (eg IOS/Android) and you can't just rely on Mario, Zelda and Pokemon anymore.

      pikachu poor poor teets :( pikaa

    Twice their forecast - so they beat the street, but in a bad way...

    >>"Strong currency being a bad thing"

    Man this decade has made a confusing life for me.

      strong currency is good if you're a buyer, bad if you're a seller if that makes any sense.

        One analogy closer to home is to say;
        with our strong dollar
        "Importing (Buying) games is cheap"
        "Farmers (Selling) wheat and livestock is expensive"

        In other words when a curency is strong, it's cheaper to buy from weaker countries, than it is trying to sell to them.
        (i hope i got that right)

    I really hope this won't mean the end of Nintendo. It will be sad to see the only 'pure' gaming company leave the competition.

      For a company that only makes games, they sure do forget to come up new games.

        fail.
        come up with*

          Correction, Nintendo don't just make games, they're primarily known for making gaming consoles as well (e.g. Nintendo 64 Console which was an awesome console by the way!). However, I do think that they need to start trying to make new games and a new games series as well.

    Struggling hardware sales would be a huge one. I don't think I could trust myself to buy any Nintendo console only because I know it'll be obsolete after a year or two, especially when the lineup is so pitiful. They need to lift their game.

    This may be a massive positive for everyone.

    Let's say that the hardware avenue seems a bit of a dud (for sake of argument, at least).

    This may be what is needed for Nintendo to refocus and develop a strong software business as a third party developer for other consoles, which gets their awesome products out there without hardware being a company distraction.

    Sega did fairly well out of it when the Dreamcast went belly up. Think about Nintendo titles being available on XBLA, the PS3, even droid/iOS app markets.

    Target the "casuals" where they live, remake billions, release an awesome console next gen, not current gen + 0.5!

      Nintendo, like Apple, see themselves as a hardware manufacturer first, and their software is specifically built around that hardware. I'd imagine they'd get out of games entirely were they to get out of the games hardware business.

    Profit is still profit, even if there's not as much of it. Obviously the Wii is doing pretty badly at the moment and the 3DS still isn't quite up there, but I think they can get it going again. Worst case scenario is that they don't hold first place in sales/popularity in the next generation of consoles.

    In any case, I'd like to think that losing profits will give Nintendo the kick they need to bring their A-game with the Wii U.

      What profit? Nintendo predicted that they would have a 6month loss of 55bln Yen, but end up with a 35bln Yen profit for the fiscal year. Now it looks like its a 100Bln Yen loss for the 6month period and as such they are likely to post a loss for the fiscal year.

    This is hardly a surprise. Nintendo have just released the 3DS and are in the process of releasing the Wii U. Doing that costs money - a lot of money. That and the dwindling Wii and DS sales if you didn't see this coming a year ago you may need to see an optometrist :p

    ...profits are down 1.3 billion... but didn't they net like 4 billion in profit last financial year?

    so they're doing MUCH more than breaking even.

      That may be so, but 1.3 billion is still a huge decrease in expected revenue. It's always a bad sign if your company's profit drops by that much. Especially if you consider that its roughly $1300000000. It is actually a lot of zeroes.

        Im not saying they didnt drop a LOT of profit. I'm saying its OBVIOUS that they would be lower in profits after a lackluster console release, but with so few new first party wii releases MOST of that money is from 3ds and 3ds software sales.

        That doesnt sound like a dying company... it sounds like nintendo post gamecube release.

        Still making a crapload of cash.

    Good.

    Either Nintendo crashes and burns or they get their **** in gear, abandon the fad-happy casual market, and actually use some of their insane amounts of money to try to make good games. Win/win imo.

      this is kinda how i feel, its hard for me to give a shit when they don't put any effort in to coming up with original ideas for games..

        Yeah, I haven't bought a nintendo product in years. The last one was a DS for my dad, and he only plays a Japanese Mahjong game on it.

        While there are mature titles on the Wii, Nintendo definitely invested heavily in their 'clean gaming' image, and even though they may not be sticking to it strickly anymore, thats still the perception of them for a lot of people. If I'm more interested in CoD, Gears of War, God of War, Bioshock, Mass Effect or Skyrim, why would I look to Nintendo when their titles are always rehashed anime-inspired English versions of Japanese "RPG's"? I think while they survived off the novelty of the Wii and the interface and it's ease of use, they've definitely failed in maintaining a wider audience through their products.

        Just sayin...

    They cut of gamecube support on the new wii model to cut costs, I've seen wii's for as low as $100 on sale, I'm sure come Christmas time sales will pick up.At $100 a new market will emerge that wouldn't pay $200, ditto for the 3DS at $200 this Xmas with no vita in australia to compete with,sure they had a bad quarter but the next one will make up for it.

    The Australian dollar is pretty strong here too and we're doing okay.

    *Looks at all the Aussie Developers being abandoned by overseas publishers for cheaper options*

    Sigh.

    That photo is why I love Nintendo - crazy Japanese bastards...

      "Super Happy Fun Time" classic photo

    Left: Troll face
    Right: i dont care face

    Well if they focused on their main audience there wouldn't have been a problem.

    They are scrambling to make these old 'retro' style titles like Mario Land 3D and the New Super Mario Bros Wii, etc because they know that they fucked up royally by snuffing the demographic that loved them for years and now they are trying to make up for it.

    I'm just gonna sit on the sideline and cross my fingers to see old, good Nintendo come back.

    That could have been the best article in the world.

    However, all I can think of is "Did Iwata eat a choccy biscuit before his speech?"

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