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Nintendo Profits in Q4 2011, Expects to Lose Over $800m in FY 3/2012

by Jacob Mazel, posted on 26 January 2012 / 3,703 Views

Nintendo's financial report for the nine months to December 2011 has arrived. Based on the nine month data we can also pull out quarterly figures for the three months to December 2011.

During April to September 2011, Nintendo previously announced that its total revenues came to 215.74b Yen ($2.77b) at current exchange rates, with a loss of 70.27b Yen ($903m) for the half year. Through nine months, Nintendo has driven the loss down susbtantially, to 48.35b Yen ($621m lost) - which indicates a profit of about $282m for the quarter. Revenue through nine months also jumped to 556.17b Yen ($7.15b), indicating revenue of $4.38b in the December 2011 quarter.

Last quarter, Nintendo projected revenue in the year to March 2012 to reach 790b Yen ($10.15b), with a loss of 20b Yen ($257m) for the year. With the all important holiday data now available, Nintendo now expects revenue to reach 660b Yen ($8.48b) and losses to reach 65b Yen ($835m) instead of 20b Yen ($257m). For comparison, Nintendo had revenue of $13.03b and profited $997m in the year to March 2011 - so the drop off implied in the new forecast is massive and continues to get a bit worse each quarter. The current forecast implies Nintendo will resume losing money in the March 2012 quarter - a $214m loss based on the nine month data.

For the quarter, Nintendo shipped 5.61 Wiis, 8.36m 3DS systems, and 2.06m DS systems. Lifetime figures for Wii reached 94.97m units globally, with DS figures reaching 151.06m. 3DS figures grew from 6.68m through September to 15.03m through December. Figures below are quarterly shipments by region followed by the new lifetime figure in the region through December 2011.

Oct-Dec 11'            Americas                    Others                              Japan                           Global

3DS                      3.34m / 5.47m            2.49m / 4.91m               2.53m / 4.66m          8.36m / 15.03m

Wii                      2.80m / 45.25m          2.27m / 37.28m             0.52m / 12.43m        5.61m / 94.97m

DS                       1.29m / 57.48m           0.71m / 60.61m            0.04m / 32.96m        2.06m / 151.06m

Previously, Nintendo projected to ship 16m 3DS, 12m Wii, and 6m DS systems in the year to March 2012. With the holiday results, Nintendo now expects to ship 14m 3DS, 10m Wii, and 5.5m DS systems for the fiscal year. These new figures imply 1.04m Wiis shipped in the March 2012 quarter, 2.58m 3DS shipped in the March 2012 quarter, and 0.86m DS systems shipped in the March 2012 quarter.

Software shipments for the March 2012 year were projected to reach 100m games for Wii (excluding bundled software), DS software shipments were projected to reach 62m, and 3DS software shipments were projected to reach 50m units. Nintendo did not lower the Wii software projection. 3DS software shipments are now forecast to reach 38m units for the March 2012 year and DS software shipments are forecast to reach 59m units for the March 2012 year.

In the December quarter, Nintendo and third parties shipped 52.17m Wii games, 19.90m 3DS games, and 22.22m DS games. Lifetime software shipments for Wii (including bundled games) stand at 805.15m, 3DS software shipments grew to 37.46m, and DS software shipments grew to 890.69m. Figures below are quarterly software shipments by region followed by the new lifetime figure in the region through December 2011.

Oct-Dec 11'          Americas                          Others                          Japan                              Global

3DS                      6.72m / 13.91m           6.92m / 13.28m          6.27m / 10.28m         19.90m / 37.46m

Wii                     28.20m / 442.99m        19.38m / 293.24m      5.03m / 68.92m         52.17m / 805.15m

DS                      11.75m / 368.62m         7.80m / 361.87m       2.67m / 205.20m       22.22m / 890.69m

For the entirety of 2011, Nintendo shipped 10.33m Wiis, 15.03m 3DS systems, and 6.47m DS systems. Wii was Nintendo's largest software market for the year - there were 109.78m Wii games shipped globally, with 73.21m DS games shipped for the year, and 37.46m 3DS games shipped.

In 2010, Nintendo and third parties had shipped 185.71m Wii games and 129.19m DS games. Thus the DS figures for software dropped by almost half, offset mostly, but not completely by 3DS gains. Wii software dropped about 40%. A similar trend is evident for hardware, Nintendo shipped 19.46m DS systems in 2010, and 17.19m Wiis, those figures declined 40% for Wii, and almost 70% for DS. With 3DS selling well after the August price cut though, Nintendo technically did ship 21.5m portable systems in 2011, compared to 19.5m in 2010, which bodes well for 2012.

Also of note is that Wii hardware declined sharply in the holiday quarter from 8.74m in Q4 2010 to 5.61m in Q4 2011. DS fell from 9.01m in Q4 2010 to 2.06m in Q4 2011. 3DS however meant that Nintendo actually shipped more portable hardware in Q4 2011 than in Q4 2010 - 10.42m 3DS + DS systems shipped in Q4 2011 compared to 9.01m DS systems shipped in Q4 2010.

The uptick in portable hardware offset about half of the Wii decline for the quarter. Software on the other hand was still fairly strong for Wii, as Zelda, dancing games, and the long-sellers performed well globally. Software was weak for DS and particularly for 3DS though. Wii software declined to 52.57m from 85.33m in Q4 2010. DS software also declined far slower than DS hardware for the quarter, to 22.22m in Q4 2011 from 44.15m in Q4 2010.

With 3DS software missing Nintendo's targets substantially (38m projected now, from 70m six months ago), this is the second big adjustment down this fiscal year for the platform despite the strength of Marioland, Mario Kart, Monster Hunter and others, total software shipments across Nintendo's platforms fell to 94.7m units in Q4 2011 from 129.5m in Q4 2010. Although the Q4 2011 figures continue to trend down on Wii and DS outweighing 3DS growth, total software shipments are still well ahead of holiday software sales realized in the holiday quarters before GC and Wii launched as N64, GC, GB, GBA were much smaller software markets making for more difficult transitions. Unlike with portable hardware though, even combined DS + 3DS software reached 42.12m units in Q4 2011 - down 5% from what DS software did by itself in Q4 2010

Contact VGChartz at jmazel@vgchartz.com


17 Comments

IIIIITHE1IIIII
IIIIITHE1IIIII (on 26 January 2012)

Nintendo makes horrible projections time after time. 70 million 3DS software? Come on...

  • +10
kowenicki
kowenicki (on 26 January 2012)

Horrific financial and overall numbers, its is no good improving profitability in one quarter if you then expect to lose it all again the next. Ninty now looking at $900m to $1bn loss for the full year and revising down their shipment forecasts further.

  • +7
OneTwoThree
OneTwoThree (on 26 January 2012)

I don't get it either. I thought that Wii and DS were selling totally exceptional, mind-blowing numbers. Now it sounds like Nintendo HAS to keep selling at that rate, otherwise they'd go bankrupt. Did their costs explode that badly?

  • +3
bobgamez
bobgamez (on 26 January 2012)

they lost like 53.7 billion yin due to exchange, I mean damn. I knew the exchange was bad but that bad? At least the profited this quarter

  • +3
menx64
menx64 (on 27 January 2012)

Nintendo is ok, they are expecting to at least break even on the 3ds hardware as soon as early next fiscal year, so I bet they are going to focus on making tons and tons of games in the next couple of months until the catch up and then continue with the strategy until the make a huge comeback. The new 2d mario seems like the right step to follow.

  • +2
DemoniOtaku
DemoniOtaku (on 26 January 2012)

I think they Will lose because haveleft die Wii and DS... the sales of those consoles are lower than their exèctatives... They should support more the consolesthat are getting out.

  • +2
TheSource
TheSource (on 26 January 2012)

I think its three things - one is R & D for Wii U and a new 3DS model. The second thing is the Yen - the longer Europe and the US insist on destroying their currencies the less money Japanese exporters can make $1 used to equal 115 Yen - as recently as 2007-2008, now its 78 Yen, which is a third of the value of a product sold in the US. Third, with the retailer cut for 3DS, they're probably selling them at a loss given the currency problems.

  • +2
kowenicki
kowenicki (on 26 January 2012)

it is more about the strength of the yen than the weakness of the Dollar. Its a flight of safety for investors as a hedge. A weak dollar and a weak euro hasn't stopped other countries exports remaining viable, S Korea for example.

  • +2
Zim
Zim (on 26 January 2012)

The yen being strong and European currencies being weak is getting kinda ridiculous. When I lived in Tokyo in 2007/08 it was around 210-220yen to the pound. It's now usually around 120-125. Nearly half what it used to be. Unfortunately not a huge amount Nintendo can do about it.

  • +1
ishiki
ishiki (on 26 January 2012)

I'm confused a bit. I'm no expert. But how come they were able to consistently make money during the gamecube, era. And now they're gonna lose 800 million. I mean the 3DS has picked up. The wii u, is worrisome, is that the reason for the loss of 800 million next year? I mean, it can't be all doom and gloom, EA's has lost that amount before and they still exist.

  • +2
  • -6
benao87
benao87 (on 26 January 2012)

Well, they never sold Gamecube at a loss, also the GBA was pretty succesful. And I'm not sure, but maybe the currency exchange was more stable at that time.

  • +4
TheSource
TheSource (on 26 January 2012)

I've been saying for months now that the 16m 3DS hardware figure would be impossible, but in retrospect the 70m sw projection was probably worse, a slightly bigger price cut would have gotten them to 16m. The 3DS hardware figures aren't that good either - to me its much more impressive that Wii did 5.1m in the West with 80m+ systems installed and only sequels released than it is that 3DS did 5.8m in the West with Mario & Mario Kart and a more recent, larger, and more important price cut (1st price cut is always most important). 3DS is only strong in Japan right now, which is why the global number is good but not great.

  • +2
kowenicki
kowenicki (on 26 January 2012)

wii is actually more impressive than 3DS when compared that way... but that says more about the 3DS than the wii. People on the forums need to finally accept it. dedicated handheld gaming IS going to decline.

  • 0
TheSource
TheSource (on 26 January 2012)

Kowenicki, just for the record, before this year X360 & PS3 Q4 numbers were essentially what Wii just did - 5.5m - 7.0m - are you suggesting those figures were horrible? I mean, for the holiday quarter its probably fairer to say, 1-3m is very bad ,3-5m is bad, 5-7m is mediocre, 7-9m is good, 9-11m is great, over 11m is incredible.

  • +1
kowenicki
kowenicki (on 26 January 2012)

I'm suggesting the Nintendo financials are horrible, really really horrible. The fall for the Wii is startlingly quick, compare it to the PS2.... the comparison with the 360 and PS3 is meaningless, operating in different markets imo (and as is now being proved). I am comparing the wii with the wii.

  • +1
happydolphin
happydolphin (on 26 January 2012)

It doesn't work that way koweniki. The Wii and the 360/PS3 have a very different curve due to business decisions by Nintendo (no HD support and mass market pricepoint). The steep fall after an explosive 2006 to 2009 is to be expected. Comparing the Wii to the Wii total HW sales numbers are fine. It's the bottom line that is horrible, in that sense I agree. But otherwise TheSource's point has bearing.

  • +1
Seece
Seece (on 26 January 2012)

No it isn't, in fact over the last 3 holiday Q's only 2009 for 360 was below the Wii's figure this holiday. For a console that was on top, yeah that aint great. Down 3m yoy ...

  • -2
happydolphin
happydolphin (on 26 January 2012)

It's a curve Seece. Unlike Microsoft, Nintendo didn't do anything to counter it, and that's due to its initial business decisions. For example, no redesign for the Wii, since the Wii was already small form factor. Another example, no 2nd gen graphics within the Wii's lifespan, since it was already maxed out as of SMG, due to it being an upgrade of the flipper et al architecture. That's what I'm trying to tell you, due to Nintendo's initial business decisions, this trend cannot be reversed. The 360 is a very different machine, and so is the PS3. Both have a very evolutionary progress in terms of graphical advancements in games within the generation. Both had redesigns. And since the Wii was already quite cheap, the HD consoles had more considerable price cuts. I'm just stating facts Seece, try not to counter simply to counter.

  • +2
kowenicki
kowenicki (on 26 January 2012)

It's actually more akin to an inverted v than a curve.

  • -1
Ail
Ail (on 26 January 2012)

the difference is that compared to the others console makers Nintendo makes a much bigger part of its revenue in Q4 so that quarter is supposed to be much higher than its competitors to make us for the rest of the year ( I mean isn't it what Iwata tried to explain at the end of Q3 ?)

  • +1
Seece
Seece (on 29 January 2012)

Happydolphin, I wasn't even replying to you, but Source.

  • 0
happydolphin
happydolphin (on 30 January 2012)

I figured that, much later. No worries about it, my comment is still there for your perusal.

  • 0
goldeneye0074eva2222
goldeneye0074eva2222 (on 27 January 2012)

people need to relax . this is the first time they have ever lost money and you can put a bet down that most of its due to the development of the nintendo wii u remember sony started losing profits for four years streight . and dont forget 85 nintnedos first time losing money. they bounced back from that they can bounce back from this its not like 3ds is failing! if it was then that be a different story . by 2013 theyll be back in the good ! and dont't forget all the markets are sliding .

  • 0
Ail
Ail (on 26 January 2012)

Can't wait for Iwata to explain us how they are confident they will meet their new projections ( I mean he's only done that so far twice this fiscal year and each time the projections were proven to be vastly wrong..)

  • -1
Ail
Ail (on 26 January 2012)

The only time Nintendo has hit a projection this gen was the 2 years were the Wii was sold out and they basically manufactured what they said they would... It's the worse track record for any multinational that I know...

  • -1
VGKing
VGKing (on 26 January 2012)

Wow so 3DS, despite dominating the Japan software chart and having multiple games in Top 10 in USA/Europe, its selling BELOW expectations?

  • -1
Salnax
Salnax (on 26 January 2012)

Blame the first 6 months.

  • +5
Train wreck
Train wreck (on 26 January 2012)

If you are an electronics company and cant make money in the Oct-Dec quarter, you don't deserve to be in business, so the small profit Nintendo made was to be expected. This is the type of performance you can except when a company puts all of its eggs on a fad, which Nintendo has done. They had no exit strategy for if and when the popularity of the Wii went away from its torrid pace from late 2006 to the first half of 2009. Blaming 3rd parties was the vogue thing to do back in 2009 but its 2012, most third parties have either ended or have wind down their Wii and DS exposure so this loss and bad guidance is all about lack of execution, all Nintendo.

  • -3
TheSource
TheSource (on 27 January 2012)

DS abandonment is more due to moving to 3DS and piracy. I'd reckon Activision (COD, Spyro), Sega (Mario & Sonic), Namco-Bandai (Go Vacation, Taiko, Fishing), and Ubisoft (Just Dance games) software actually all outperformed expectations on Wii this holiday, while Zelda, Wii Play: Motion, Wii Party, Kirby and some other Nintendo content underperformed. I still don't get the Wii as a fad argument - motion controls are going to be around in 20 years in some form or another. Just because Wii has aged in general there isn't much evidence motion controls died - see Just Dance, Wii Party, all huge and recent games. Guitar Hero was a fad - it was unrealistic to expect people to buy expensive plastic instruments every year. You guys act like the trajectory of Wii is dramatically different from other systems, it was identical in shape to PS2 until Nintendo's poorly protected motion monopoly ended in 2010, and now resembles an elongated PS1 trajectory. You also don't need an exit strategy in this industry when people are used to upgrading every five to six years. 3DS is the exit strategy. I guess the other point is Sony and most third party publishers (EA, THQ, etc) are fairly likely to lose money or barely break even in the Dec 2011 quarter despite nominally being electronics companies.

  • +2

Comments below voting threshold

ryuzaki57
ryuzaki57 (on 26 January 2012)

3DS software shipment is a complete disaster. Nintendo underestimated the damage they do to 3rd parties with the dominance of their own IPs. Smartphones might be for something as well...

  • -5
IIIIITHE1IIIII
IIIIITHE1IIIII (on 26 January 2012)

Wait, what? Nintendo's first party titles are too good for third parties to have a chance? Nintendo's IPs are DAMAGING the system???

Dear god...

  • +4
Nintendogamer
Nintendogamer (on 26 January 2012)

Wii isn't a success till it hits 100,000,000.

  • -8