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Nintendo Suffers 60 Percent Drop In Profits In Most Recent Fiscal Year

by Mike Futter on Apr 27, 2016 at 02:23 AM

Nintendo has reported its year-end financials, and while the company has closed in the black, the results show staggering decline. While sales only show a slight dip, net profits dropped by 60.6 percent to ¥16.5 billion ($148.5 million).

Nintendo’s operating income is a bright spot among the financial report with a jump of 32.7 percent to ¥32.9 billion ($296 million). With the NX now known to be coming in 2017 and the new Zelda delayed again, Nintendo is hinging the first nine months of its new fiscal year on 3DS.

The company has a heavy hitter in Pokémon Sun and Moon, but the rest of the first-party lineup isn’t nearly as powerful. Highlights from first-party on the 3DS include Bravely Second End Layer and Kirby: Planet Robobot, which are part of the new fiscal year. 

On the Wii U, upcoming games include Tokyo Mirage Sessions #FE and Paper Mario Color Splash. The weak critical response to Star Fox Zero and Star Fox Guard likely won’t do Nintendo any favors.  

Nintendo has revised down its expected Wii U sales in FY17, anticipating only selling 800,000 units worldwide. That’s down from 3.3 million consoles worldwide in the fiscal year ended March 31, 2016.

Nintendo is also being understandably conservative about the 3DS, which is now a fully matured device. The company expects to sell 5 million during the year across the family that includes 3DS, 3DS XL, 2DS, New 3DS, and New 3DS XL.

Nintendo’s biggest software sellers during the year were Animal Crossing: Happy Home Designer on 3DS with 3 million units and Splatoon on Wii U with 4.3 million. The inky shooter bested Super Mario Maker, which sold a respectable 3.5 million since its launch.

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


Our Take
With NX and Zelda now launching in 2017 (though still in the new fiscal year should they make the announced March window), Nintendo is setting itself up for a rough nine months. The company will be all but absent this holiday season, and its E3 showing is limited to The Legend of Zelda. Today's news puts the last nail in Wii U's coffin, with the system now officially in "lame duck" status.

While I suspect NX will give Nintendo a boost for Q4 and full-year, the financials are going to be ugly leading up to the launch. A Wii U price drop is long overdue, but if it does happen, Nintendo might be able to woo people who have been waiting to jump in.