Nintendo forecasts big loss, Wii U doomed?

For the financial year ending March 2014, Nintendo has cut its sales forecast of the Wii U console from 9 million to 2.8 million units.

This is even less than the 3.45 million units forecast for the March 2013 financial year. Wii U Game sale projections are down to 19 million from 38 million units.

The company also predicts a big financial loss of US$240 million (±R2.6 billion) for the year.

This changes their forecast from Yen100 million profit to a Yen35 million loss.

3DS sales were cut to 13.5 million from 18 million units. 3DS games sales are down to 66 million from 80 million units.

The bad news caused Nintendo’s share price to plummet to the lowest point since 2001.

Launched in November 2012, the Wii U has failed to capture the minds and wallets of gamers as did the wildly popular Wii predecessor.

This is a sad state of affairs for Nintendo, compared to the over 2 million units sold in launch month boasted by both Sony and Microsoft for their PS4 and Xbox One.

Armchair commentators and industry analysts alike have run the gamut of reasons for this, among them: high price; underpowered hardware; lack of console selling games; poor consumer awareness on the product’s features; and simply bad timing as core gamers awaited the transition to powerful next-gen consoles.

Nintendo still has room to manoeuvre though, as they sit on a cash-cushion of R88 billion which can be used to formulate an implement a new strategy.

Satoru Iwata

Nintendo going mobile?

Speaking at a press briefing, Nintendo president Satoru Iwata said the company is looking at a new business model.

“We are thinking about a new business structure. Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business. It’s not as simple as enabling Mario to move on a smartphone,” said Iwata.

According to Reuters, Iwata apologised to shareholders for the bad performance, but said there will be no management shake-up in the short term and he does not intend to step down.