As predicted by many, Nintendo just sent an official note to investors axing its sales forecasts for the current fiscal year, and not just by a little bit.
The previous forecast mentioned 9 million Wii U units sold, and it has now been radically reduced to only 2.8 million. Forecast for 3DS hardware sales has also been reduced from 18 millions to “only” 13.5 million units. Airquotes are obligatory here, as 13.5 million units sold in a year are still definitely flattering, while showing a slight decline from last year’s total just south of 14 million.
The previously forecasted operating income has also been dropped from 100 billion yen to an operating loss of 35 billion yen, while ordinary income was lowered from 90 billion yen to five billion yen. Net income turned from the forecast of 55 billion yen into a predicted net loss of 25 billion.
The note motivated the sizable correction to the forecast:
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 mainly due to the fact that hardware sales did not reach their expected level. As a result, the total of selling, general and administrative expenses will surpass gross profit, which leads to an operating loss.
It’ll be interesting to see if this kind of results will lead to changes at the top of Nintendo’s Ivory tower, but we’ll probably have to wait for the end of the fiscal year on March 31st to witness any relevant move from Kyoto’s historical developer.