Nintendo slashes forecasts, projects 2.8M Wii U shipments for fiscal year

[Dohc-WP]

Nintendo severely adjusted its forecasts for the fiscal year ending March 31, 2014, almost halving its original net sales projection and reducing expected Wii U shipments from 9 million to 2.8 million. The Japanese company noted the Wii U's "significantly lower" than predicted overseas sales, as well as the price cuts made worldwide to the console, as factors in the profit revisions. Below-target 3DS sales overseas were also noted, as was increased expenditure on research and development.

Nintendo's net sales projection dropped from ¥920 billion to ¥590 billion, which converts as $8.8 billion to $5.6 billion. Rather than posting a net profit of ¥55 billion or $530 million for the fiscal year, the company is bracing itself for a net loss of ¥25 billion, or $240 million.

Today's figures suggest Nintendo saw a welcome if not spectacular upturn in Wii U sales and shipments over the holidays. The company shipped 460,000 consoles across the first two quarters (March to September 2013), so a rise to 2.8 million by March 2014 represents significant improvement. If that figure proves accurate, then by March 2014 the company will have shipped 6.2 million units total since the Wii U's launch in November 2012. Also, Wii U software shipments for the fiscal year are expected to reach 19 million now, exactly half the original projection, That will take software figures since launch up to 32.4 million.

3DS projections for the fiscal year also took a hit, down from 18 million to 13.5 million. In today's announcement, Nintendo President Satoru Iwata noted strong sales in Japan, but a failure for the handheld to reach targets overseas, and particularly in Europe. The estimate for software shipments dropped from 80 million to 66 million.

We'll get a clearer sense of how Nintendo performed across the holiday period on January 29, when the company will release release its Q3 financial results. The company will then hold a Corporate Management Policy Briefing on January 30, when it will divulge "more information on our short-term as well as mid-term prospects."


Sources : Nintendo (1),Joystiq (2)

 

[Edelweiss]

Already posted a thread this morning..

http://mygaming.co.za/forum/showthr...-slashes-Wii-U-sales-forecast-from-9m-to-2-8m

Merge possibly?

 

[Nemesis]

Remember when Nintendo wash THE console to have? Sad days but I do hope they pull off something great soon. Competition is always good for the market. Hey, you never know, maybe we will see Nintendo games on other consoles if they go the way of Sega.

 

[Edelweiss]

Remember when Nintendo wash THE console to have? Sad days but I do hope they pull off something great soon. Competition is always good for the market. Hey, you never know, maybe we will see Nintendo games on other consoles if they go the way of Sega.

Iwata said he'd rather see the company wither away than to see it go the way of Sega. I think the near-death experience of Nintendo is necessary so that they can finally wake up restructure everything, bring in some new/modern talent, re-innovate and start anew and get their asses into gear and get with the times.

 

[Edelweiss]

Nintendo, the Japanese gaming giant and creator of the Super Mario franchise, has issued a profit warning blaming weaker-than-expected Wii U console sales.

It now expects to make an operating loss of 35bn yen (R3,650.43 ()m; R3,650.02 ()m) for the financial year ending 31 March 2014.

Its initial estimate was for an operating profit of 100bn yen.

Nintendo said the key reason behind the downgrade was weaker-than-expected sales during the holiday season.

"In the year-end sales season which constitutes the highest proportion of the annual sales volume, software sales with a relatively high margin were significantly lower than our original forecasts," the firm said in a statement.

Losing faith
It said weak software sales were "mainly due to the fact that hardware sales did not reach their expected level".

The company cut its global Wii U sales forecast for the business year from nine million to 2.8 million units - a cut of nearly 70%.

It also reduced the sales forecast for its 3DS console from 18 million to 13.5 million units.

Three months ago Nintendo was standing by its sales projections for the Wii U, despite signs, from the UK at least, that retailers were losing faith in the product.

In July last year, UK supermarket chain Asda said it would no longer be selling the Wii U in its stores.

Online streaming
Nintendo has faced tough competition from rival games console makers, such as Microsoft with its new Xbox One, and Sony with its new PlayStation 4.

There is also a general trend towards online streaming of games to make them available over a variety of devices, such as mobiles and smart TVs.

At the recent Consumer Electronics Show in Las Vegas, Sony announced that PlayStation Now subscribers will be able to play some of the platform's greatest hits without the need to own a console.

Sony said it may offer its games to third-party products as well.

'Disappointing'
This month Nintendo's shares received a boost after China lifted a sales ban on foreign video games consoles.

The Chinese government said it would allow foreign firms to make consoles in the recently-launched Shanghai free trade zone and sell them across the country.

Nintendo's shares have risen 56% over the last 52-week period, reaching a two-and-a-half year high in January, but this latest profits warning - issued after the Tokyo markets closed - is likely to affect the share price on Monday.

"The fact that the Wii U strategy has failed is disappointing and will likely trigger a sell-off as soon as the market opens," said Makoto Kikuchi, chief executive of Myojo Asset Management.

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