News

Nintendo Drops 2015 Sales Forecast Despite Strong Holiday Quarter

by Mike Futter on Jan 28, 2015 at 01:48 AM

Nintendo picked up steam in the third quarter of its 2015 fiscal year. The company reported a significant uptick in operating and net income over this time last year, but has decided to lower its sales and operating income projections.

At the same time, the company is lifting ordinary income and net income forecasts slightly. This comes from exceedingly positive currency exchange rates and significant proportion of sales coming from outside Japan.

The company reported quarterly sales of ¥271.5 billion ($2.3 billion) and net income of ¥45.2 billion ($382.97 million). Benefits from favorable currency conversion (on a weaker Yen) represented ¥51 billion ($432 million), as 73 percent of year-to-date sales were from the Americas, Europe, and other overseas territories.

Wii U sales jumped significantly, with 1.91 million units sold during the quarter (bringing the year-to-date sales to 3.03 million of a 3.6 million target). Life-to-date Wii U sales are approaching 10 million, with 9.2 million sold.

3DS sales flagged again in this quarter, leading to a precipitous drop in forecast. Nintendo sold 4.99 million handhelds in the 3DS family (inclusive of the new 3DS), but dropped sales expectations from 12 million on the year to 9 million. 

While Nintendo has not updated its comprehensive sales document, we do know that Pokémon Omega Ruby and Alpha Sapphire sold-in a combined 9.35 million units. Super Smash Brothers on 3DS has now sold-in 6.19 million copies.

Mario Kart 8 and Super Smash Brothers for Wii U, both which shipped in the current fiscal year have reached total shipments of 4.77 million and 3.39 million respectively. This puts attach rates for these games at 51.8 percent and 36.8 percent (a significant uptick for the latter).

We expect more information to arrive from Nintendo in the coming days, including updated release schedules. It has also been some time since the company updated its software sales rankings, and hope to be able to share that data soon.

[Source: Nintendo (1), (2)]

 

Our Take
Mario Kart 8 continues to attach at a growing rate, which bears out its importance to Nintendo’s home console line. The (pleasant) surprise is that Super Smash Bros. for Wii U has attracted a larger than anticipated crowd (based on past generation attach rates). Wii U sales were expectedly strong in the holiday quarter, and Nintendo is now in a race to the finish line to hit its 3.6 million unit sale goal for the year.

Nintendo continues to overestimate the adoption of its handheld line, though. While there is no doubt that the New 3DS XL will sell well in the United States, Nintendo needs to continue to communicate its value for those considering an upgrade (beyond a fancy Majora’s Mask deco).

Interestingly and despite the demand for them, Amiibo figures were not mentioned specifically in the earnings release. I expect that more details will be made available once information from the investor briefing is translated into English.