Nintendo Reports $455 Million Loss But Has High Hopes For Next Year

Nintendo Reports $455 Million Loss But Has High Hopes For Next Year

Nintendo Logo

Nintendo ate an operating loss of nearly half a billion dollars for the 2013 fiscal year but still believes the Wii U has what it takes to pull it out of the fire.

Nintendo has released its financial results for the fiscal year ended March 31, 2014, and the numbers are even uglier than expected. In January, the company revised its full-year projection sharply downward, predicting an operating loss of $355 million, but that turned out to be well short of the actual number: a loss of 46.4 billion yen, which works out to roughly $455.3 million.

It came closer in its revised estimate of Wii U unit sales, which it cut from 9 million to 2.8 million in January; actual sales came out to 2.72 million units worldwide. The 3DS in all its various flavors achieved 12.26 million unit sales over the year, slightly lower than the 13.5 million units predicted.

"The Wii U hardware still has a negative impact on Nintendo's profits owing mainly to its markdown in the United States and Europe, and unit sales of software, which has high profit margins, did not grow sufficiently, leading to a gross profit of 163.2 billion yen," Nintendo said. "Total selling, general and administrative expenses exceeded gross profit, resulting in an operating loss of 46.4 billion yen."

Nonetheless, Nintendo isn't throwing in the towel just yet. The Wii U faces a "challenging sales situation," the company said, demonstrating a remarkable talent for understatement, but it will continue to focus on efforts to "stimulate the platform."

"By providing software that takes advantage of the Wii U GamePad, utilizing its built-in functionality as an NFC reader/writer, and adding Nintendo DS Virtual Console titles to the Wii U software lineup, Nintendo will seek to enrich the value of the Wii U GamePad, the most important differentiator of Wii U, and as a result expand the sales of the Wii U platform," the report states.

Mario Kart 8 and Super Smash Bros. for Wii U are expected to be the "two main drivers" of Wii U sales, which Nintendo has forecast for the fiscal year ending March 31, 2015 at 3.6 million units - still far from world-beating numbers but a dramatic improvement over the current situation.

Source: Nintendo (PDF)

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I certainly don't hate the console but I think that game pad has been its crutch. its not well used and hinders the system more the enhances it. it makes the other wii-motes feel pretty useless or an add on to the experience. multiplayer games like to force one player to use the pad while everyone else uses the wii-mote.

hopefully the software manages the systems assets better.

Wii U is in deep trouble. First quarter 2013 in shipped only 390,000 units, first quarter 2014 it only shipped 310,000 units a 20% year on year drop very bad for a new console.

And 3DS isn't doing well either.

3DS shipments

1st year - 3.61 million (ending 31/03/2011) (34 days sales Japan / 7 days or less for EU/USA)
2nd year - 13.53 million (ending 31/03/2012)
3rd year - 13.95 million (ending 31/03/2013)
4th year - 12.24 million (ending 31/03/2014)

compare that to the Gameboy Advance that never had the huge casual crowd of the DS

Gameboy Advance shipments

1st year - 1.07 million (ending 31/03/2001) (11 day year only Japan sales)
2nd year - 17.09 million (ending 31/03/2002)
3rd year - 15.65 million (ending 31/03/2003)
4th year - 17.59 million (ending 31/03/2004)

Merlark:
I certainly don't hate the console but I think that game pad has been its crutch. its not well used and hinders the system more the enhances it. it makes the other wii-motes feel pretty useless or an add on to the experience. multiplayer games like to force one player to use the pad while everyone else uses the wii-mote.

hopefully the software manages the systems assets better.

I love the Wii U but the more I've been using it the more I'm kinda agreeing with this statement. I've been using the Pro Controller over the Gamepad more often than not. The only thing I use it for now is to navigate the main Wii U menu. It kind of makes me wonder what it would be like if Nintendo took all the time and money used to make the Gamepad and used it to beef up the main console while shipping the Pro Controller as the default controller.

Maybe they'll finally learn that waiting 3-4 years to release the big guns is a bad way to do business these days?

No wonder they announced new Pokemon games. Crafty devils.

though the NET LOSS is actually half that. Basically it's the same as they've had before. Not exactly something to get fired up about, especially since they just reminded us "oh yeah, we're remaking Pokemon Sapphire and Ruby." Not exactly a hole Nintendo can't fill with ease.

6 Words for Nintendo:
Release the FUCKING SDK for free!

Get on those gamepad games please! I can barely think of any games I've played on WiiU recently where the gamepad is utilized in an "essential" manner. I really think this asymmetrical gaming thing has some legs, but it doesn't seem like any developers are running with it... lots of crawling and walking mostly.

it must be dizzying, circling that drain for the past few years. every time i see a nintendo story, i'm shocked by how in denial they are about their situation and place in the market. they are so arrogant and narcissistic, assuming they are as important and powerful as they were in the nineties. when you get to where you're going, tell Sega and Atari I said hello.

Well, that Year of Luigi didn't go all that well then.

I don't know how they can have a more successful console after this.

Mario Kart 8 and Smash won't do much.

VG_Addict:
I don't know how they can have a more successful console after this.

Mario Kart 8 and Smash won't do much.

I was thinking the same thing. There isn't anything that makes Mario Kart 8, and Smash must buys. They were fun games you liked to have if you owned a Nintendo console, but if you don't it's not going to make you want to buy one... as least in most cases.

Aiddon:
though the NET LOSS is actually half that. Basically it's the same as they've had before. Not exactly something to get fired up about, especially since they just reminded us "oh yeah, we're remaking Pokemon Sapphire and Ruby." Not exactly a hole Nintendo can't fill with ease.

The net loss is the operating loss, unless you're referring to a figure that includes interest gain/loss and taxes, but I can't see that total being as small as half the operating loss.

Well, crap. I'm sorry to hear Nintendo isn't doing well, but then, they haven't really given me a whole lot of reasons to buy a Wii-U, either.

I hope they can turn it around... But I think everyone's still waiting for that killer app. C'mon, guys, you have a unique platform for asymmetrical multiplayer and you've hardly done bupkus with it. Let's get an online splitscreen RTS with four friends playing first-person and one player giving commands, waypoints, and drops with the Game Pad. Let's have a dungeon-hack with the Game Pad player setting out the monsters. Or a brawler where the GamePad player gets to rotate the world. Something!

Andy Shandy:
Well, that Year of Luigi didn't go all that well then.

what do you mean? that year was a total failure... just like Luigi!

anyways i honestly dont know what nintendo could do a this point, the best i can do is become the 507th capatain hindsight to point out they shouldnt have bet it all on the casual market, they shouldnt have released a console so underpowered and they shouldnt have relied on what was clearly a gimmick to try and pull the same level of sales and innovation the wii pulled

NuclearKangaroo:

what do you mean? that year was a total failure... just like Luigi!

anyways i honestly dont know what nintendo could do a this point, the best i can do is become the 507th capatain hindsight to point out they shouldnt have bet it all on the casual market, they shouldnt have released a console so underpowered and they shouldnt have relied on what was clearly a gimmick to try and pull the same level of sales and innovation the wii pulled

The "casual" market had nothing to do with it except MAYBE Nintendo should have catered to them MORE instead of expecting the hisorically fickle "hardcore" gamers to come back. Considering how "hardcore" gamers didn't show up and then derided Nintendo every chance they got, the lesson is crystal clear: leave them behind and go your own path because they're all talk.

Aiddon:

NuclearKangaroo:

what do you mean? that year was a total failure... just like Luigi!

anyways i honestly dont know what nintendo could do a this point, the best i can do is become the 507th capatain hindsight to point out they shouldnt have bet it all on the casual market, they shouldnt have released a console so underpowered and they shouldnt have relied on what was clearly a gimmick to try and pull the same level of sales and innovation the wii pulled

The "casual" market had nothing to do with it except MAYBE Nintendo should have catered to them MORE instead of expecting the hisorically fickle "hardcore" gamers to come back. Considering how "hardcore" gamers didn't show up and then derided Nintendo every chance they got, the lesson is crystal clear: leave them behind and go your own path because they're all talk.

hah! as if nintendo truthly tried cater to the hardcore playerbase

look mate, hardcore players move units, ive seen that kind of shit tons on PC, and i have no reason to think consoles are any different

casuals? one day they are playing on their wii, the next they are playing on facebook, the next on their iphones, they will always jump to the next fad, they are unreliable

Callate:
I hope they can turn it around... But I think everyone's still waiting for that killer app. C'mon, guys, you have a unique platform for asymmetrical multiplayer and you've hardly done bupkus with it. Let's get an online splitscreen RTS with four friends playing first-person and one player giving commands, waypoints, and drops with the Game Pad. Let's have a dungeon-hack with the Game Pad player setting out the monsters. Or a brawler where the GamePad player gets to rotate the world. Something!

Pretty much this. They've hardly done a damn thing with the gamepad, though to be fair they don't have the manpower to develop a ton of quality gamepad-centric titles alongside the more standard fare that people are familiar/interested in. If third parties have done anything with the gamepad I'm ignorant to it.

Nintendo needs to do what they did with Bayonetta, but instead throw money at as many studios as they can afford to make games that heavily utilise the gamepad (like the ones you mentioned). Get a Dungeons & Dragons game on there where the Dungeon Master wields the pad and drives the game/story. Integrate video gaming with tabletop/board gaming. Bring out a Mario Party game where one player controls Bowser and plays against the other four. Call it Bowser Party. Done.

Ugh I'll just post a tldr version of what I usually post in stuff like this.

The wii was a fluke because the gimmick looked cool, the new gimmick doesnt look cool, a lot of the customers aren't coming back because they thought the wii sucked or they arent gamers and lost interest, the wiiu launched without a proper zelda or metroid or 64/sunshine/galaxy style mario game or smash bros and only 1 of those has even been announced, aaaaand the wiiu's controller and lack of processing power will keep it from getting ports of multiplatform games made for all the other consoles and PC.

Things look grim and there isn't even any reassurance or promise of much else to make it better coming back from nintendo, even if you were inclined to give them the benefit of the doubt.

Aiddon:

NuclearKangaroo:

what do you mean? that year was a total failure... just like Luigi!

anyways i honestly dont know what nintendo could do a this point, the best i can do is become the 507th capatain hindsight to point out they shouldnt have bet it all on the casual market, they shouldnt have released a console so underpowered and they shouldnt have relied on what was clearly a gimmick to try and pull the same level of sales and innovation the wii pulled

The "casual" market had nothing to do with it except MAYBE Nintendo should have catered to them MORE instead of expecting the hisorically fickle "hardcore" gamers to come back.
Considering how "hardcore" gamers didn't show up and then derided Nintendo every chance they got, the lesson is crystal clear: leave them behind and go your own path because they're all talk.

image
Hookay, but seriously though.

Casuals have smartphones.</discussionofcasuals>

Hardcores want a strong lineup of 3rd party games and to actually know those games exist. Oh, and we want Metroid. A good one. Oh, and perhaps for them to stop hinging their entire business strategy on sticking to the big 3 IPs (or in this case, one Smash Bros. game) and do something with their lesser-known IPs. And do something different with their already ubiquitous IPs.

Guitarmasterx7:
Ugh I'll just post a tldr version of what I usually post in stuff like this.

The wii was a fluke because the gimmick looked cool, the new gimmick doesnt look cool, a lot of the customers aren't coming back because they thought the wii sucked or they arent gamers and lost interest, the wiiu launched without a proper zelda or metroid or 64/sunshine/galaxy style mario game or smash bros and only 1 of those has even been announced, aaaaand the wiiu's controller and lack of processing power will keep it from getting ports of multiplatform games made for all the other consoles and PC.

Things look grim and there isn't even any reassurance or promise of much else to make it better coming back from nintendo, even if you were inclined to give them the benefit of the doubt.

Things do look grim, but they still got Mario Kart 8 this month, upcoming Advance and DS on VC and Smash Brothers this Vinter + whatever they might release and announce during the summer. There's a ton of indie games on the way and i could imagine that Bayonetta 2 and X will be released before Smash Brothers. The machine itself is fine, it got more games than it's competetion, it just lacks customer support at the moment, but they can still turn it around, numbers vise they aren't that far behind.

You uhhh...might have to do something really 'out there' for once, Nintendo. Standard Operating Procedure isn't gonna cut it.

NuclearKangaroo:

hah! as if nintendo truthly tried cater to the hardcore playerbase

look mate, hardcore players move units, ive seen that kind of shit tons on PC, and i have no reason to think consoles are any different

casuals? one day they are playing on their wii, the next they are playing on facebook, the next on their iphones, they will always jump to the next fad, they are unreliable

Ah yes, that great big lie people try to feebly perpetuate. Here's a little secret: if "casual" gamers are really on iPhones and iPads now, gaming in general is in for a rude awakening. "Hardcore" gamers move units? That's a load of crap. "Hardcore" comic book fans didn't make The Dark Knight Rises or The Avengers a billion dollars, "hardcore" gamers don't make games sell 10 million units or more. Do you think the DS, the PS1, the PS3, the GBA, or even the PS3 and 360 sold over 50 million units because of "hardcore" gamers? Because that's just not statistically possible. The mainstream will ALWAYS outnumber the "hardcore", that's just the way the world works. And an entire industry that caters to the "hardcore" is doomed to extinction

I don't know about nintendo, I feel no need or desire to buy a Nintendo console right now. Okay neither would I buy a PS4 or xbox one or PS Vita right now but.. at least I am looking at what they are offering. But I don't feel a need at all to buy for instance a nintendo 3DS. Still playing pokemon on my DS.

Or a WiiU, the wii I own yes bought it second hand :) it is stored. At least it won't get dusty but it is stored. And the games I really bought the Wii for about 3-4 titles thats it.

A Wii U, okay I would be able to enjoy a new mario game or luigi game. Alone.. ;! Right lets not! So what kind of story driven game can I then play on a WiiU. Right.. there is that Lego game that is relative open world. I like open world games. But my playstation 3 has more of them.

See that is the problem I feel no reason nor desire to buy or own one. Maybe I am to old, but that would be silly after all isn't my age group the early gamer group.

Anyhow I hope for nintendo that their luck rises. May they get a game that really really pulls people in. Something exciting and different then the PS4 and Xbox One will offer. And no I don't mean yet another Mario.

Yes a new Zelda perhaps will make it a much wanted console.

Aiddon:
Ah yes, that great big lie people try to feebly perpetuate. Here's a little secret: if "casual" gamers are really on iPhones and iPads now, gaming in general is in for a rude awakening. "Hardcore" gamers move units? That's a load of crap. "Hardcore" comic book fans didn't make The Dark Knight Rises or The Avengers a billion dollars, "hardcore" gamers don't make games sell 10 million units or more. Do you think the DS, the PS1, the PS3, the GBA, or even the PS3 and 360 sold over 50 million units because of "hardcore" gamers? Because that's just not statistically possible. The mainstream will ALWAYS outnumber the "hardcore", that's just the way the world works. And an entire industry that caters to the "hardcore" is doomed to extinction

It only took the PS4 5 months to eclipse the Wii Us sales numbers (Xbox One isn't far behind), which has been on sale for 17 months at this point. It looks like catering to the hardcore and 3rd party publishers has been a pretty safe bet for Sony and Microsoft. Sure the casual players are a larger part of the market, but they are incredibly fickle, and you shouldn't base your bets on trying to figure out what they are going to do next.

Aiddon:

NuclearKangaroo:

hah! as if nintendo truthly tried cater to the hardcore playerbase

look mate, hardcore players move units, ive seen that kind of shit tons on PC, and i have no reason to think consoles are any different

casuals? one day they are playing on their wii, the next they are playing on facebook, the next on their iphones, they will always jump to the next fad, they are unreliable

Ah yes, that great big lie people try to feebly perpetuate. Here's a little secret: if "casual" gamers are really on iPhones and iPads now, gaming in general is in for a rude awakening. "Hardcore" gamers move units? That's a load of crap. "Hardcore" comic book fans didn't make The Dark Knight Rises or The Avengers a billion dollars, "hardcore" gamers don't make games sell 10 million units or more. Do you think the DS, the PS1, the PS3, the GBA, or even the PS3 and 360 sold over 50 million units because of "hardcore" gamers? Because that's just not statistically possible. The mainstream will ALWAYS outnumber the "hardcore", that's just the way the world works. And an entire industry that caters to the "hardcore" is doomed to extinction

hardcore gamers have made DAYZ, Rust, Starbound and Kerbal Space Program, successes before they are even finished, hardcore gamers have funded countless games via kickstarter, hardcore gamers are the reason steam has over 75 million players

unless you are going to argue casuals are into play testing, funding ideas for video games and building and maintaining PCs

its true, the mainstream market is bigger than the hardcore market, but at the same time is much more inconsistent, while a hardcore gamer is very likely to buy your game as long as its good

MrBaskerville:

Things do look grim, but they still got Mario Kart 8 this month, upcoming Advance and DS on VC and Smash Brothers this Vinter + whatever they might release and announce during the summer. There's a ton of indie games on the way and i could imagine that Bayonetta 2 and X will be released before Smash Brothers. The machine itself is fine, it got more games than it's competetion, it just lacks customer support at the moment, but they can still turn it around, numbers vise they aren't that far behind.

I honestly don't think so. It was around this time last year people were saying that Pikmin 3 would move units. When that flopped it was the incredibly niche Wonderful 101 that was to move Wii-Units. When that flopped it was told that Donkey Kong Tropical Freeze would sell units. When that didn't happen the new Super Mario 3D World was supposedly for sure going to move units, as it was a Mario title. Nope. Game sold well, but it sold to people who already had a Wii U.

I can't see Mario Kart 8 moving units because well....it's the 8th installment. You know what you're going to get and fans of the series most likely already have a Wii U. Same goes for Smash Bros. Bayonetta 2 won't sell well because to be honest its pretty niche and Mature titles have a history of bombing hard on recent Nintendo consoles.

Nintendo needs to utilized some of its lesser used IPs and stop relying on major ones that have been cranking out games semi annually for the past 29 years. Most people who played Mario and Zelda when they were new (back in the mid 1980s) were around 10. Those people are now around 40. And the average age of gamers is 30. That's a large portion of the market that likely does not care that much about Mario anymore, and the constant re-re-re-re-release of older Nintendo titles is frankly strangling the Nostalgia out of the franchises. You can't not innovate on game design for 30 years and expect everyone to keep wanting the product.

Only so long you can say "If it ain't broken why fix it?" Before people say "It may not be broken but its not as good anymore" by voting with their wallets.

I honestly think its fans of Nintendo's N64 era who need to stop making excuses for lazy game development, both on the lack of innovation and the lack of games in general for the Wii U.

NuclearKangaroo:

its true, the mainstream market is bigger than the hardcore market, but at the same time is much more inconsistent, while a hardcore gamer is very likely to buy your game as long as its good

^^^^^^^^^^^^^^^^^^^^^^^^^^^^Thiiiiiiiiiiiiiiiis.

The casual market is the worst market in terms of long term. The sales of the Wii show that. The last 3 years of the Wii's lifespan showed very little sales while the PS3 and 360 sold steadily.

People who game as a hobby are more likely to buy games, and more of them. You're not going to hook a lot of casual gamers into 30+ year old franchises like Mario and Zelda. At least not without doing something major to the formula. There should have been an open world Pokemon game on a Nintendo console by now with online trading/battle capabilities. Not using the Wii-Mote in an innovative way with the Wii outside of Wii Sports also was such a boneheaded move.

Guitarmasterx7:
Ugh I'll just post a tldr version of what I usually post in stuff like this.

The wii was a fluke because the gimmick looked cool, the new gimmick doesnt look cool, a lot of the customers aren't coming back because they thought the wii sucked or they arent gamers and lost interest, the wiiu launched without a proper zelda or metroid or 64/sunshine/galaxy style mario game or smash bros and only 1 of those has even been announced, aaaaand the wiiu's controller and lack of processing power will keep it from getting ports of multiplatform games made for all the other consoles and PC.

Things look grim and there isn't even any reassurance or promise of much else to make it better coming back from nintendo, even if you were inclined to give them the benefit of the doubt.

This. The new gimmick makes both the casual and the hardcore wonder why. "So you want me to use a tablet to play games on my TV?" But they already have a console for playing games on the TV, which is more or less better than this one, and they already have a tablet to play games on, that is bidder better and far more portable than the WiiU. So they look at it and go "what's the point?"

if what they claim about the sales numbers is true, then codghosts being the highest selling game on ps4 and xbone sort of indicates that most of their money isn't in hardcore gamers

it's just that mainstream has shifted away from nintendo

even with the large funding numbers of some indie studios, they aren't anything compared to what the mainstream industry churns through each cycle

Aiddon:
though the NET LOSS is actually half that. Basically it's the same as they've had before. Not exactly something to get fired up about, especially since they just reminded us "oh yeah, we're remaking Pokemon Sapphire and Ruby." Not exactly a hole Nintendo can't fill with ease.

"It's only a flesh wound!"

image

Nintendo couldn't top the 3DS sales from last year, sold 7 million less "next gen" consoles than predicted (a measly 20% of the stock) and rounded it up losing half a billion dollars.

 

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