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Nintendo Revises Forecast, Anticipates 1 Million Fewer Than Expected 3DS Sales
Nintendo has issued revised guidance for its fiscal year ending March 31, 2016. The company has scaled back its sales and profit expectations as well as its projections for 3DS sales. The news comes after a holiday quarter that showed a significant drop in profits.
The publisher anticipates falling short of its 3DS goal of 7.6 million units sold by 1 million (13.2 percent decrease). It also anticipates a software shortfall of 9 million, down to 47 million units (19 percent decrease). Both fall short of full-year performance during last fiscal year.
Wii U hardware projections are unchanged, and Nintendo has lifted expectations on the software side to 27 million units (17 percent increase). Despite strong Amiibo sales and better-than-expected Wii U software performance, Nintendo has drastically lowered its operating income and profit projections.
Sales are now anticipated to come in at ¥500 billion ($4.45 billion), down 12.3 percent. Operating income is expected to fall short of forecast by 34 percent, landing at ¥33 billion ($293.6 million). Profit will likely miss original estimates by 51.4 percent, but still come in at ¥17 billion ($151.3 million).
Nintendo’s upcoming fiscal year includes Star Fox Zero, The Legend of Zelda for Wii U, Bravely Second, and two Dragon Quest ports.
[Source: Nintendo]
Our Take
While the 3DS is still a strong system, hardware sales are starting to go into decline as the market is saturated. The software fall-off is more concerning, however. There are 58 million of the handhelds out there, and software purchase should still be remaining level or increasing.
With the NX likely to enter the market in 2017, Nintendo can’t afford to launch a new handheld in close proximity. The 3DS still has life left in it, but those software numbers need to improve.
The Wii U software stats don’t make up for the 3DS shortfall, but it would be a mistake not to look at that as a short-term win for Nintendo. The Legend of Zelda might send the system out with a big push.
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