Nintendo posts another huge loss, but decline is slowing

Nintendo has reported (PDF) a 6.8 per cent decline in revenue to 201 billion yen (AU$2.43 billion) in the six months ended 30 September. It also lost 28 billion yen during the period, though that was actually better than the 70.3 billion yen that it lost a year earlier.

The Wii is hanging on to Nintendo's financials.
(Credit: Nintendo)

Nintendo's troubles were caused mainly by the Wii, whose sales fell off a cliff. Last year, Nintendo sold 3.4 million Wiis during the six-month period; this year, sales plummeted to 1.3 million. Wii software sales slumped to 23.7 million units — a steep decline from the 36 million units that Nintendo sold last year.

The Wii's troubles are nothing new. For the last couple of years, Nintendo has watched Wii sales slowly fall as demand dries up. The Wii's major troubles during the last six months were exacerbated by its successor, the Wii U.

Nintendo has been making a strong push for the Wii U, releasing commercials and holding special events to highlight its hardware and software. The console, which will launch on 18 November, offers a host of improvements over its predecessor, including HD graphics and more powerful components, allowing it to dish out better-looking games. The console is accompanied by the GamePad controller, which features a 6.2-inch LCD display that's capable of interacting with a game on the television, as well as allowing users to play a title when they go mobile.

Locally, the Wii U will start at AU$349 for the Basic set, offering the console and GamePad. An AU$429 Deluxe set adds a stand, charging station and copy of the Nintendo Land video game.

Nintendo's portable, the 3DS, also appears to be doing well. Nintendo sold 5 million 3DS units during the six-month period, up from the 3 million that it sold last year. Out of that, 2.1 million sales were of the 3DS XL, a product featuring bigger displays than the standard 3DS. Nintendo launched the 3DS XL this year.

As one might expect, given the increase in 3DS sales, the portable's software sales were also up, hitting 19 million units. Last year, total software sales hit 8 million units.

Looking ahead, Nintendo expects to turn things around with 810 billion yen in revenue for the year ending 31 March, up 25 per cent compared to the previous fiscal year. The company expects to post a 6 billion yen profit.


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