Nintendo Money Printing Press Is Finished, Huge Losses Expected

Today in Osaka, Nintendo released its revised forecast for this financial year. Things are not good.

"We had higher expectations for the year-end season, but failed to meet them," Nintendo Satoru Iwata said today (via Reuters).

Nintendo is facing a bigger than expected annual loss, facing competition from smartphones and battling a strong yen as well as rivals Microsoft and Sony.

According to Reuters Nintendo is expecting an annual operating loss of ¥45 billion ($575 million). Analysts originally forecasted a lost of ¥4.2 billion yen ($51 million).

Hardware sales are not meeting expectations — though, things could be worse. In October 27, 2011, Nintendo forecasted hardware sales at six million DS units shipped for 2012, but as of January 26, 2012, changed that number to 5.5 million DS units. For DS software, the forecast changed from 62 million to 59 million units.

On October 27, 2011, Nintendo forecasted 12 million Wii units sold in the 2012 financial year. That number was revised to 10 million units. Wii software was originally forecasted at 100 million. That number was unchanged.

The 3DS is both on the comeback trail but still underperforming. On October 27, 2011, Nintendo forecasted 16 million 3DS units shipped. That number has been changed to 14 million. For 3DS software, Nintendo forecasted 50 million units shipped. On January 26, 2012, that number was changed to 38 million units ship — a huge drop.

Earlier this year, Iwata said he was taking the blame for the 3DS by taking a 50 per cent paycut.

Fund manager Mitsushige Akino told Reuters, "Their time of growth (from consoles) is over, and, while I don't think the company will cease to exist, if they don't move into new categories, they will no doubt lose the great scale they've amassed."

Nintendo wowed gaming with an impressive run that included the Nintendo DS and the Wii, spawning the generation of game consoles. That run, it seems, is over.

Nintendo is heading for its first annual loss in 30 years.

Nintendo sees first annual loss, cuts 3DS forecast [Reuters]

Top photo: Chiaki Tsukumo/AP

Comments

    *insert bias outrage here*'

    Ninty sitting on a huge cash reserve its hard to be too worried.

    I hope the seccond lot of ambassedor games are decent when the 3DS drops to $9.99

    HOw do you lose this much money when every console sells at a profit?
    Yes, sales are down, but WT hell? Somebody is going to have explain a loss of 575Million. Exchange loss would seem irrelevent to how many consoles were sold, and would only be worse if you sold more.
    Seems to me like they should sack their accounts staff not the sales, software and hardware teams!

      Probably because they're in a development cycle at the moment. Money is being spent on the Wii U which isn't being made back.
      Still, the first annual loss in 30 years is an incredible track record.
      And I don't see anything about staff being sacked, which is very difficult in Japan, only the president taking a 50% pay cut, which I wish would happen more often over here when a company started to struggle.

        Yeah, that's downright incredible. A CEO admitting that his company has lost money under his leadership and personally taking the hit for it?

        I mean, everyone always comments that if a CEO were to take a paycut they could save a lot of jobs and would still receive a decent salary, but for someone to actually do it?

        That man is pure class.

          It's more indicative of the Japanese culture than anything. Taking full, personal responsibility for failure and the consequences that go with it. If he didn't, he wouldn't be looked upon very highly by his colleagues. It's all about honour.

      You do realize that the 3DS is selling at a loss now?

    If Nintendo dies because of Apple, I'll personally hunt down Steve Jobs and... wait, what?

    Nintendo is dieing because of the software it needs to stop being to dependant on Mario and Zelda all the time, eventually both icons will start to die down, then what does Nintendo have left? Sure they scored the deal with monster hunter in Japan (IMO mainly the reason why its beating the Vita) but they need some good 3rd party dev's, like Rare back in the day.

      Nothing to do with the games, everything to do with hardware.

        You're right. I'm sure the 3DS's sales rise had nothing to do with the quality software that released at the same time. You should probably inform the 3rd party developers of their irrelevance; the console's sales will continue to escalate, regardless of the quality of games available. Also let nintendo know that their underpowered, HD-free home console was a problem after it dominated the competition regardless. for years. Really?

        You're right. I'm sure the 3DS's sales rise had nothing to do with the quality software that released at the same time. You should probably inform the 3rd party developers of their irrelevance; the console's sales will continue to escalate, regardless of the quality of games available. Also let nintendo know that their underpowered, HD-free home console was a problem after it dominated the competition regardless. for years.

    This is really quite insignificant. They're smack bang in the middle of development and early stages of a console launch right now. In 3 years - about 2 years after the Wii U's release - they'll be rolling in money.

    Nintendo's not doing anything wrong or making mistakes. It's just that part of the cycle.

      How ignorant. This is the first time they've posted a loss in 30 years? This is obviously throughout multiple development cycles. Lets put away the Zelda-shaped shields, shall we?

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