Nintendo Reports Decreased Year-Over-Year Profit In Third Quarter On Weak Wii U Sales
Nintendo has reported its third quarter results, putting financial results to the sales forecast revision we reported last week. The company reports ¥10.2 billion ($99 million) net profit for the first nine months of the fiscal year, but this is a decrease of nearly 30 percent over this time last year.
This quarter was impressive for Nintendo, accounting for ¥9.6 billion of the ¥10.2 billion bottom line. Wii U sales are still negatively impacting Nintendo’s finances, according to company statement. Reports from French outlet AFP (by way of Polygon) indicate that president Satoru Iwata and key members of Nintendo’s executive team will be taking temporary pay cuts until June. Iwata will reduce his salary by 50 percent, with others foregoing 20 to 30 percent.
This is despite 1.95 million consoles sold (compared to 460,000 for the preceding six months) and 966 million software units moved (compared to 630,000 for the trailing half year). Nintendo expects to sell another 390,000 Wii U consoles by the end of its fiscal year on March 31, bringing lifetime sales to just over 6 million.
The 3DS sold 5.65 million handhelds in the 3DS family, of which 2.11 million were the new 2DS units. In total for the year, Nintendo has sold 11.7 million 3DS family consoles of a new forecast of 13.5 million by March 31, 2014 for the year and approximately 44 million life-to-date.
Pokémon has been a huge performer for Nintendo this year, with combined X and Y sales totaling 11.61 million. Worldwide, Animal Crossing: New Leaf has sold 3.52 million, Mario & Luigi Dream Team is at 2 million, and The Legend of Zelda: A Link Between Worlds has sold 2.18 million.
On the Wii U, Wind Waker HD, Wii Party U, and Super Mario 3D World have each sold more than 1 million units. Nintendo is expected to hold a briefing tomorrow.
After the sales forecast revision last week, we expected that year-over-year performance would be down. A 30 percent drop is severe, and I expect that the Iwata will need to present a plan at tomorrow’s briefing. Nintendo is a healthy company with impressive market capitalization, but the trend needs to turn around soon. Investors will expect to see a plan for improvement implemented quickly.