The lights are on
This morning brought expected news from Nintendo of continued financial shortfalls. Earlier this week, we reported analyst predictions of operating income losses amounting to 18.7 billion yen. As it turns out, these estimates were conservative.
Actual operating income shortfalls amounted to 36.4 billion yen ($365 million), which is only slightly better than fiscal year 2012. Nintendo has pinned the loss on missed sales projections for the Wii U, which sold 3.45 million units worldwide (and only approximately 400,000 consoles in the last quarter). By comparison, the Nintendo Wii sold approximately 5.8 million units between November 2006 and March 31, 2007 (the same relative period of that hardware's life cycle).
The 3DS, which is largely regarded as successful, saw lower than anticipated movement with 13.95 million units. In January, Nintendo lowered projections for both consoles to 4 million units for the Wii U and 15 million units for the 3DS.
Nintendo's net income was positive for 2013, improving from a shortfall of 43 billion yen ($430 million) to a surplus of 7 billion yen ($70 million). The improvement is due in large part to favorable currency exchange rates. Operating income remains a better indication of performance, especially as global president Satoru Iwata has made a personal guarantee to improve that measure to a positive 100 billion yen ($1 billion) by March 31, 2014.
The financial news comes with word of leadership changes at Nintendo. Iwata has assumed the role of CEO of Nintendo of America, in addition to his other responsibilities. He replaces Tatsumi Kimishima who was promoted to managing director of parent Nintendo Company, Ltd. Kimishima replaces two retiring company officials. Reggie Fils-Aime remains president and chief operating officer of Nintendo of America.
Whether the added responsibilities for Iwata will further his mission to drastically turn around his company's financial performance or serve as a distraction remains to be seen. What is clear is that the Wii U has been a significant failure so far for Nintendo due to poor communication of the system's benefits.
Low sales have lead to an early drop off of third-party support, even from Ubisoft, who was one of the biggest supporters of Nintendo's latest system prior to launch. Nintendo has yet to ramp up significant first-party titles, and with EA pulling nearly all support, the house of Mario has an enormous mountain to climb in order to reach Iwata's self-imposed 100 billion yen summit.
[Source: Nintendo (1), (2), (3), (4)]
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I hope Nintendo reads these comments, you guys speak the truth! I miss the golden days of playing with power, Nintendo power. /sigh.....
As I recall, the Xbox 360 wasn't very popular at first. Just wait for E3.
How about you release a new Smash Bros. or Zelda on Wii U, Nintendo? I'll bet all it'll take to move more systems is a first party title. O, and Pokemon X & Y will come out, and people will buy 3DS's.
The severe lack of third-party games is what worries me. If it weren't for Nintendo's own games I wouldn't have any interest at all. Nintendo HAS to get dev's on board, not by releasing half-assed games, but by releasing quality games the other consoles get that also leverage what the Wii U can do. When a new game is announced and there isn't any Wii U support, that says to me that maybe I shouldn't bother saving up for the console.
Third-party support won't return until the BigN goes back to creating consoles that are on-par with current technological standards. Why would any third-party developer want to make a second, sub-par version of their game that won't sell anyway? Sure, graphics aren't everything, but why limit yourself? I get what they were trying to do with the Wii (that is, sell to our parents). However, the WiiU doesn't hold that same waggle-appeal for parents and we're left with a console that only benefits first-party titles.
I don't want to see any company fail and Nintendo is still pulling in a profit which is great but this is my opinion not anyone else's, the wii was a very bad system that is why it got no third party support and the wii U is really not a next gem system, so third party developers are not going to want to have a watered down product of game when the ps4 and the next Xbox are capable of so much more judging by specs. I assume new Xbox will b on par w ps4. Yes Nintendo has some good exclusives but that to me is not worth buying a system for a handful of games
They actually did two huge mistakes :
1 - An incredible lack of release lineup (good ?) games.
2 - An awfull comunication on the Wii U features.
These are so big mistakes that I honestly think that they knew it but decided to "release as soon as possible" the console and probably hoped the would surf on the Wii wave.
While this could have worked (with better communication) it was still reckless...
Well at least they are trying to advertise the console, releasing solid titles and supporting the indie crowd-owait. So far the only things even worth thinking about buying on the WiiU are first party titles, maybe Nintendo should just hop out of the hardware department. Just spit-balling, but I'd be plenty happy with not buying a nintendo system and playing the games on my other consoles.
It's unfortunate, but not really surprising either considering that the entire industry is struggling right now. The one bit of good news is Iwata taking over as CEO of Nintendo of America. One of my main problems with Reggie has been his failure to localize quite a few Japanese games, just look at how long it took for us to get Xenoblade and The Last Story. So with Iwata involved, maybe we'll see more Japanese games make it to America.