Nintendo profit falls on sluggish Wii U sales (Update)

Jan 29, 2014 by Yuriko Nagano
In this Sunday, Dec. 15, 2013 file photo, shoppers take escalators painted with the logo of Nintendo and Super Mario characters at an electronics store in Tokyo. Nintendo Co. says its profit for the first nine months of the fiscal year fell 30 percent because of languishing sales of its Wii U home consoles and game software. The Japanese maker of Super Mario video games reported Wednesday, Jan. 29, 2014, a 10.2 billion yen ($99 million) profit from April to December, down from 14.55 billion yen a year earlier. It did not break down quarterly numbers. (AP Photo/Shizuo Kambayashi, File)

Profit at Nintendo Co. fell 30 percent in the first nine months of the fiscal year as sales of Wii U home consoles, 3DS devices and game software languished. Top executives announced they would take pay cuts.

The Japanese maker of Super Mario and Pokemon video games reported Wednesday a 10.2 billion yen ($99 million) profit from April to December, down from 14.55 billion yen a year earlier. It did not break down quarterly numbers.

Nintendo's president, senior managing director, managing director and directors said they will take a pay cut for five months starting in February to take responsibility for the poor performance.

President Satoru Iwata's pay will be halved, two representative directors including reputed game creator Shigeru Miyamoto, were hit with a 30 percent cut. The other seven board members will lose 20 percent of their pay, according to the company.

The popularity of smartphones, tablets and other gadgets has been drawing consumers away from consoles devoted to games. Nintendo has resisted changing its business to incorporate such devices.

"It would be a positive surprise if Nintendo comes out with an online game strategy for smartphones, although the market doesn't expect that move," said Tomoaki Kawasaki, senior analyst at IwaiCosmo Securities Co.

In this photo taken Sunday, Dec. 15, 2013, shoppers walk through the sales floor of Nintendo 3DS video game software at an electronics store in Tokyo. Nintendo Co. says its profit for the first nine months of the fiscal year fell 30 percent because of languishing sales of its Wii U home consoles and game software. The Japanese maker of Super Mario video games reported Wednesday, Jan. 29, 2014, a 10.2 billion yen ($99 million) profit from April to December, down from 14.55 billion yen a year earlier. It did not break down quarterly numbers. (AP Photo/Shizuo Kambayashi)

Consumers will still buy Nintendo games if they are wowed by them, but that hasn't been happening, he said.

The Kyoto-based company this month forecast a loss of 25 billion yen ($242 million) for the fiscal year through March 2014. It had earlier forecast a profit of 55 billion yen ($532 million). Nintendo had profit of 7 billion yen last fiscal year.

Nintendo slashed its annual forecast for Wii U sales from 9 million units to just 2.8 million, fewer than a third of its earlier estimate.

The company said it sold 2.4 million units in April through December, a slower pace than 3 million units in the same period of 2012.

"In the fourth quarter, we expect sales to decrease significantly due to seasonal factors as the year-end sales season concludes," Nintendo said in a statement.

Nintendo also cut the sales forecast for its hand-held 3DS video game devices to 13.5 million units from 18 million units for the fiscal year.

The company is expecting software sales to struggle as well.

Nintendo's philosophy is to take the road less traveled and "they have been steadfast in sticking to that strategy," said Eiji Maeda, senior analyst at SMBC Nikko Securities Inc.

Nintendo hits a home run once in a while, said Maeda, noting that the Wii and DS devices were hits.

The weak yen, which is generally a plus for exporters such as Nintendo, was not enough to offset the damage from sluggish sales. Nintendo racked up a foreign exchange gain of 48 billion yen ($465 million) during the first three quarters, more than double the same period the previous year.

Explore further: Nintendo reports loss as Wii U sales languish

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Nintendo reports loss as Wii U sales languish

Oct 30, 2013

Video game maker Nintendo sank to a loss in the latest quarter as sales of its Wii U game console continued to be eroded by a shift to gaming on smartphones and tablets.

Yen fall returns Nintendo to profit (Update)

Jul 31, 2013

Nintendo is making money again courtesy of a weaker yen but its business selling game machines is ailing, with sales of its flagship Wii U console still lackluster.

Nintendo returns to profit on weak yen boost

Apr 24, 2013

Nintendo Co. returned to profit for the fiscal year ended March 31 as a lift from the weakening yen offset sales struggles caused by software delays for its latest home console Wii U.

Nintendo returns to profit, lowers sales forecasts

Jan 30, 2013

Japanese video game maker Nintendo Co. returned to the black for the first nine months of its business year and more than doubled its profit forecast for the full year, getting a perk from a weaker yen, despite ...

Holidays key test for Nintendo as Wii U struggles

Dec 19, 2013

This holiday season Nintendo faces a critical test with its Wii U video game console that is pitted against Sony's PlayStation 4 and Microsoft's Xbox One as it seeks to revive flagging sales.

Recommended for you

Technip, Heerema win third giant Angolan oil contract

2 hours ago

The ultra-deep Angolan offshore oil project called Kaombo generated the third huge contract in three days on Wednesday when French group Total picked two firms to carry out underwater engineering worth $3.5 billion.

Yahoo sees signs of growth in 'core' (Update)

16 hours ago

Yahoo reported a stronger-than-expected first-quarter profit Tuesday, results hailed by chief executive Marissa Mayer as showing growth in the Web giant's "core" business.

Twitter buys data analytics partner Gnip

19 hours ago

Twitter says it has bought its data partner Gnip, which provides analysis of the more than 500 million tweets its users share each day—to advertisers, academic institutions, politicians and other customers.

User comments : 0

More news stories

Floating nuclear plants could ride out tsunamis

When an earthquake and tsunami struck the Fukushima Daiichi nuclear plant complex in 2011, neither the quake nor the inundation caused the ensuing contamination. Rather, it was the aftereffects—specifically, ...

Unlocking secrets of new solar material

(Phys.org) —A new solar material that has the same crystal structure as a mineral first found in the Ural Mountains in 1839 is shooting up the efficiency charts faster than almost anything researchers have ...