The lights are on
Nintendo has reported its financial results for the fiscal year ending March 31, 2014. Sales and operating income fell short of even lowered projections that were released in January 2014.
Total worldwide sales ¥571.7 billion ($5.6 billion) against a revised forecast of ¥590 billion ($5.79 billion). This was lowered from a ¥920 billion ($9 billion) dated April 2013.
Nintendo’s operating income also fell short. In January, the company shifted from ¥100 billion ($981.6 million) positive result to a warning of a ¥35 billion ($343 million) shortfall. The actual result was an even bigger shortfall of ¥46.4 billion ($455.7 million).
Net income was slightly up on the back of favorable exchange rates. Nintendo predicted a loss of ¥25 billion ($245.4 million) and ended with ¥23.22 billion in losses ($227.9 million).
This brings Nintendo’s total operating losses to ¥120.16 billion ($1.18 billion) for the last three years combined. Nintendo is projecting positive operations of ¥40 billion ($392.7 million) for the current fiscal year.
Wii U and 3DS sales missed their marks. Nintendo sold 2.72 million Wii Us against a January 2014 goal of 2.8 million for the year. This target was a third of the 9 million the company originally promised to sell for the period.
3DS sales also slumped with 12.24 million units sold for the fiscal year against a revised forecast of 13.5 million. In April 2013, Nintendo promised investors it would move 18 million handhelds.
On the software side, 3DS gamers bought a bit more than the revised forecasts expected. Nintendo told investors in January it would move 66 million units, but managed to sell 67.9 million. Unfortunately, this doesn’t come close to the 80 million originally targeted for the year. Wii U software missed the mark, though. 18.9 million units were sold against a revised expectation of 19 million (down from the original projection of 38 million).
Nintendo has not set ambitious goals for itself for the year ending March 31, 2015. Despite the upcoming releases of Mario Kart 8 and Super Smash Bros., the company only expects to sell 3.6 million Wii Us worldwide over the 12-month period. It also has modest goals for software, expecting to move only 20 million units.
For 3DS, Nintendo is forecasting a drop to 12 million handhelds. Software is targeted at 67 million units.
We expect to have revised sales numbers for each of the titles selling over 1 million units soon. We’ll share that information when available.
Our TakeThe flagging sales of Wii U and even 3DS aren’t good, but I’m focused on the future. Nintendo has set very low goals for both systems, and I can’t help but think that the Wii U numbers are optimistic.
Perhaps Nintendo has decided to set very modest goals so it can tout success later. But it’s hard not to look at the Wii U expectations as capitulation given the upcoming releases of two titles that are expected to be a boost for the platform.
Nintendo has flatly denied it will show new hardware at E3. I’m not sure it will wait until 2015 to make that move, though.