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Nintendo Posts Slim 2012 Profit

Jonathan Lester
3DS, Financial reports, Financials, Nintendo, Wii U

Nintendo Posts Slim 2012 Profit

But Wii U Sales Still Painfully Slow

Nintendo has posted their FY2013 financial report, which makes for an interesting read (by financial report standards, at least). Though they has failed to meet their sales projections by a staggering 50% margin, an overall profit has defied numerous critics who foresaw another loss for the console manufacturer, and puts them in a strong position next to numerous loss-making publishers.

The TL:DR version is that the 3DS is selling very well indeed, but the Wii U is struggling to shift both hardware and games. If you want to know more, I've rounded up the salient details after the break.

Let's start with the big picture. Nintendo logged full-year sales of ¥635.4 billion (£4.1 billion), which comes in well under January's projection of ¥670 billion, and an operating loss of ¥36.4 billion (£239.5 million). Ultimately, this has lead to the company making a slight profit overall of ¥7 billion (£46.7m), much of which is down to currency exchange gains as opposed to sales. Despite this being less than 50% of their optimistic ¥14 billion estimate, it's still good news for Ninty, whose critics (such as Bloomberg) expected them to post a significant loss. Considering that last year heralded their first ever annual loss, a crippling deficit of £328.7m, things are definitely looking up.

3DS hardware and software sales all failed to meet their targets (13.95 million units sold compared to an estimated 15 million), but still helped buoy up the company in the face of truly miserable Wii U sales. Not only has the new console still failed to ship 4 million units worldwide, but a paltry 390,000 were sold over the last three months, due in part to a non-existent advertising campaign and a dearth of interesting exclusives beyond Monster Hunter 3 Ultimate and LEGO City Undercover.

Nintendo Posts Slim 2012 Profit

Looking ahead, Nintendo expects to shift a total of 9 million Wii U consoles in the next financial year, and an additional 18 million 3DS handhelds. They're projecting a £362 million profit, suggesting that the incoming software lineup will turn their fortunes around.

“During the next several months, Nintendo expects to launch new titles in the Mario Kart (Wii U), Super Mario Bros. (Wii U), Wii Fit (Wii U), Pikmin (Wii U), The Legend of Zelda (Wii U and Nintendo 3DS), Mario & Luigi (Nintendo 3DS) and Pokémon (Nintendo 3DS) franchises," gushes the report.

“These games, along with titles from Nintendo’s third-party publishing partners, will help drive hardware momentum and introduce new audiences to the Wii U and Nintendo 3DS platforms.”

We'll have to wait and see whether this actually happens, but we're convinced that the 3DS deserves to have one hell of a year thanks to a killer lineup.

Add a comment4 comments
Late  Apr. 24, 2013 at 11:58

I haven't seen the full figures, but a £240m operating loss and an overall profit of £47m doesn't sound great. Looks like they're operating at a loss but managed to scrape a profit thanks to non-trading income (mainly exchange rate variations and accounting adjustments?).

If the element of your business that you're controlling is losing massive amounts of money and the element of your business that's largely out of your control* is the only part that's making money then you're surviving thanks to chance/fortune rather than good business.

Like I say, I've not looked at the figures, and the above is just an initial gut reaction...

*(and partly illusory i.e. not real cash)

Last edited by Late, Apr. 24, 2013 at 12:06
JonLester  Apr. 24, 2013 at 12:03

@Late: I omitted that from the post since it's not really juicy game-related stuff, but you're right, much if not all of their profit stems from currency exchange gains (your exchange rate variations). I've briefly added a few words explaining that.

Last edited by JonLester, Apr. 24, 2013 at 12:04
phil16  Apr. 24, 2013 at 13:16

Its a real shame to see them struggling. If i'm honest i'd love a Wii U if just to play the new lego game but I just can't justify spending £250+ on a console I might only ever play a few games on - not when similar cash will get me a new graphics card that desperately needs replacing and will probably end up letting me play 100s of games... Not sure what they could do to address this as even if the premium was £150 its still a lot for the 2 or 3 games i'm interested in.

Realhoneyman  Apr. 24, 2013 at 18:47

These sales figures are not overly suprising given the tepid reception of the Wii U among the general consumer public. Anyone with nouse can tell you for free that the 3DS is getting and will continue to receive valuable software support, helping to push sales and get machines into players' hands.

Conversely, the Wii U is a console that has few wow features to offer gamers, meaning many of us will sit pretty until we know the precise release date of the PS4 and after which will likely purchase one with bated breath and reckless abandon.

You could say if there was a time Nintendo was going to bring its killer apps for the Wii U, this financial year would be a good time. Reading about the company's history in a separate book recently, it'd be sad to see that legacy go to waste...

Last edited by Realhoneyman, Apr. 24, 2013 at 18:49

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