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Nintendo misses its fiscal forecasts as the Wii U struggles to sell

Although Nintendo was able to swing back to profits for the 2012 fiscal year, the company ended up recording only half of its previously forecasted income, while the Wii U sold just 3.45 million units.
Although Nintendo was able to swing back to profits for the 2012 fiscal year ended March 31, the company ended up recording only half of its previously forecasted income. Nintendo says that while its games were popular in the Japanese market, it is struggling to hit targets overseas, where it is not generating sufficient sales momentum. While the company was able to record a net profit thanks to a favorable exchange rate, operating loss -- which is a better indicator of a company's core operations -- was 36.4 billion yen ($366.0 million) as a result of the negative impact of the Nintendo Wii U launch. New Super Mario Bros. 2, released for the Nintendo 3DS last August, has sold 6.42 million copies worldwide, says Nintendo, while the new Animal Crossing on 3DS has sold 3 million units in Japan alone since launching in November. Overall, the Nintendo 3DS sold 13.95 million hardware units worldwide during the 2012 fiscal year, meaning that the total number of 3DS handhelds sold is now 31.09 million, and that the handheld sold 1.24 million units in the fourth and final quarter. This also means that Nintendo failed to miss its sales projection of 15 million for the console, despite cutting the estimate down earlier this year. As for the Nintendo Wii U, the publisher says that New Super Mario Bros. U and Nintendo Land have sold 2.15 million units and 2.6 million units respectively. The Wii U console has sold 3.45 million hardware units worldwide -- again missing its previous forecast of 4 million units sold for this fiscal year, and down significantly from its original forecast of 5.5 million units sold. This means that just 390,000 Wii U units were sold in the last quarter. The Nintendo DS saw 2.35 million hardware units sold (now 153.87 million units sold to date), with Pokemon Black & White 2 bringing in a total of 7.81 million sales worldwide between them. For the fiscal year ended March 31, 2013, the company posted revenues of 635.4 billion yen ($6.4 billion), down 1.9 percent year-over-year, and profits of 7.1 billion yen ($71.4 million), compared to losses of 43.2 billion yen ($434.5 million) year-over-year. Nintendo said a favorable exchange rate from a depreciated yen helped the company out of the red, as the Japanese company exported goods to regions with stronger currency. Notably, these figures missed Nintendo's previous forecast for the year, with revenue down 5.2 percent compared to what the company had estimated, and profits down 49.3 percent, from the previously projected 14 billion yen ($140.7 million).

Fiscal 2013

Looking to the next fiscal year, Nintendo says that it aims to break the overseas market by concentrating on proactively releasing key Nintendo titles. As part of this effort, Nintendo plans to more actively support Japanese studios in bringing their games overseas. The company will also aim to boost digital sales of packaged software, in order to increase the number of new sales opportunities. Looking to the Wii U, Nintendo notes that a number of the most notable titles for the console were delayed, and that it plans to make sure this happens less often. The company says that it will continue to communicate the features of the hardware to as many people as possible, especially through the Miiverse channel. Nintendo estimates that it will see revenues of 920 billion yen ($9.2 billion) for the next fiscal year and profits of 55 billion yen ($553.2 million), with 9 million Wii U hardware units sold, and 18 million 3DS handhelds sold.

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