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Nintendo posts huge operating loss for first half of 2011

Thursday, 27th October 2011 09:05 GMT By Stace Harman

As expected, Nintendo has posted a huge net loss of some ¥70.3 billion ($926 million) for the six months to September 30 2011.

Nintendo’s official posting has confirmed yesterday’s predictions that the company has taken a tumble from its previously strong financial position, though the picture is not quite as gloomy as Japanese newspaper Nikkei had feared.

Nintendo Co Ltd posted the ¥70.3 billion net income loss for March – September 2011, which was worst than it initially forecast and is way down on the ¥2 billion net income loss for the same period last year. Sales can in at ¥215 billion, which is well below firm’s half-year forecast of ¥240 billion.

In light of the loss, Nintendo also revised its full-year net income down from a ¥20 billion profit to a ¥20 billion loss. In total, the company shipped 9 million hardware units and more than 73 million software units during the half year.

One of the primary issue for the Japanese company is believed to be the soaring value of the yen, damaging profits repatriated from overseas.

For the period, the firm sold 8.13 million units of 3DS software, and combined sales for its NDS hardware line (DSL, DSi, DSi XL) were 2.58 million units. Combined software units sold for NDS handhelds hit the 28.99 million mark.

Wii moved 3.35 million units for the period, and 36.45 million software units were sold for the system.

The slide denoting consolidated sales units, number of new titles, and unit forecast is posted below.

Figures here are quoted from reports on the investor relations page of Nintendo’s website.

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13 Comments

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  1. Anders

    That’s quite a revision.

    #1 3 years ago
  2. Blerk

    ItEatsMoney.gif

    #2 3 years ago
  3. G1GAHURTZ

    See! I TOLD you the Wii was a fad!

    #3 3 years ago
  4. YoungZer0

    Well deserved, i’d say.

    #4 3 years ago
  5. Shonak

    @4: +1

    #5 3 years ago
  6. dreamcastnews

    Oh please! The Wii has been on the market for 5 years now! Hardly a fad is it? Why Nintendo would even want to change its strategy to benefit players of the other consoles is beyond me…. These players didn’t want a Gamecube and sure as hell won’t want a Wii-U.

    Bear in mind gents, that these losses are most likely due to Nintendo’s R&D costs for both 3DS and Wii-U.

    #6 3 years ago
  7. G1GAHURTZ

    I was joking.

    #7 3 years ago
  8. dreamcastnews

    It’s actually frustrating that Nintendo don’t stick to ‘if it ain’t broke’. The Wii and DS range didn’t need updating, those that didn’t like it wouldn’t buy it, they had it so right (in a sales way rather than gamers) to the point where Microsoft and Sony got in on the action.

    They will end up like Sega at this rate, it’s already happening with the lack of communication between NoE, NoA & NoJ.

    #8 3 years ago
  9. deathgaze

    Correct me if I’m wrong, but isn’t this the first time Nintendo hasn’t posted a profit since, like, the 80s? If I’m right (and I’m pretty damn sure I am), this represents a huge 180 for a company that has always been profitable.

    The 3DS was a huge bungle and it doesn’t look like Wii U will fix any of the mistakes the Wii made. Nintendo still can’t catch up with it’s competitors as far as online functionality. To make things even worse, only ONE notable title is coming out for the Wii within the next 6 months: Skyward Sword.

    Things aren’t looking good for the Big N.

    #9 3 years ago
  10. dreamcastnews

    I think in 2003-05 they were posting heavy losses also if my memory serves me correctly.

    #10 3 years ago
  11. deathgaze

    @10: Nope. Doesn’t look like it. This is the FIRST time they’ve ever lost money. Baaaad ju-ju.

    #11 3 years ago
  12. The_Red

    @ Spot on the communications problem though state of communication between Sega offices was beyond lacking. What different parts of Sega were doing at the time was more like suicide.

    #12 3 years ago
  13. typeface

    deathgaze is right, they haven’t posted a loss in a few decades. The gamecube might not have sold a lot but they weren’t in any major danger thanks to their handhelds.

    But this news pretty much most likely confirms that this FY will be at a loss for them. However one shouldn’t forget that they do have some surplus capital and reserves from the years the DS and Wii did ridiculously well to keep them stable – though there’s bound to be less experimental titles in the short term.

    Thing is the best way out for them right now is to focus primarily on Japan for the short term while the other currencies recover. Had the wii had more titles to be released in the next year it would’ve been nice but since it doesn’t their best bet is to focus primarily on the 3DS with a Wii U launch at the earliest during q3 2012 in Japan alone and a 2013 launch for the rest of the world. Like it or not, they need to focus on their domestic market if they want to break even though that might not be positive in the long run. So the best bet is 3DS globally focussed with a strong domestic core and Wii U initial focus to be at the domestic market.

    This isn’t really talking about in the gamer sense of course but for short term growth.

    #13 3 years ago