Nintendo released today its financial results for the six months ended on September 30th, 2016, also giving an update on hardware and software shipments for the Wii U and 3DS consoles.
According to the figures above, compared with historical data, only 340,000 Wii U units have been shipped between July 1st and September 30th, on top of 1.78 million 3DS units.
Below you can see the consolidated operating results. Net sales declined by 33% year on year, and both operating income and ordinary income were in the red, showing rather significant losses. Yet, due to the sales of part of the ownership in the company managing the Seattle Mariners, the Nintendo as a whole still managed to post an overall profit.
Nintendo also provided a statement via press release, including an in-depth analysis of the results for the quarter.
“During the six months ended September 30, 2016, we saw strong trends for the global release of Kirby: Planet Robobot. On the hardware side, Nintendo 2DS saw sales growth. The release of the smart device application Pokémon GO led to increased sales of software in the Pokémon series released in the past and drove the Nintendo 3DS family hardware sales growth, particularly outside of Japan. The sales volume for hardware this period was 2.71 million units (19% increase on a year- on-year basis) , while software held steady with the previous year at 19.23 million units sold.
For the Wii U console, we have decided to ship 0.8 million units this fiscal year, based on our forecasts of comprehensive demand for Nintendo hardware. Activity has conformed to our expectations from the start of the fiscal year, with hardware sales volume of 0.56 million units (53% decrease on a year-on-year basis).
There were no hit titles this period to compare with Splatoon and Super Mario Maker last year, so the software sales were 8.3 million units (33% decrease on a year-on-year basis). As there were few new software titles offering amiibo functionality, amiibo sales were reduced to 3.8 million units for figure-type and 1.7 million units for card-type. In addition, there were relatively fewer offerings of downloadable content during this period, so download sales were down on the same period last year.
Along with this background, we felt the impacts of a strengthening yen, resulting in an operating loss of 5.9 billion yen against net sales of 136.8 billion yen (of which overseas sales were 97.3 billion yen or 71.1% of the total sales). We have also included 12.0 billion yen of share of profit of entities accounted for using the equity method related to The Pokémon Company and other companies, but we incurred foreign exchange losses totaling 39.9 billion yen, resulting in an ordinary loss of 30.8 billion yen.
However, due to the sale of part of our ownership in the company that manages the Seattle Mariners Major League Baseball team, we recorded gain on sales of investment securities totaling 62.7 billion yen as extraordinary income, meaning that profit attributable to owners of parent was 38.2 billion yen.”
The statement included the outlook for the current fiscal year, which was modified since the previous forecast from April. Sales, operating income and ordinary income were revised downwards, while overall profit was increased again due to the sale related to the Seattle Mariners.
While the newly revealed Nintendo Switch is mentioned, no further details were provided in the press release, nor did it get a firm release date on top of the previously announced March 2017 window. This would put the launch of the console within this fiscal year, but Nintendo doesn’t appear to have factored in this outlook a significant increase in revenue due to the release, at least for now.
“For the Nintendo 3DS system, we are planning global release of the latest titles in the Pokémon series, Pokémon Sun/Moon, in November, as well as the Nintendo 3DS version of last year’s major hit for Wii U, Super Mario Maker for Nintendo 3DS, in December. We also have a range of strong third-party titles expected during this year. We have also revealed that our new-concept gaming system, previously referred to using the development codename NX, will be released under the official name of Nintendo Switch.
Nintendo Switch offers a wholly new concept as a home gaming system that can switch between different styles of play. We are planning to release it worldwide in March 2017. We are also bringing back the NES home consoles that were popular in the 1980s in a palm-sized version.
Nintendo Entertainment System: NES Classic Edition will launch with 30 well-loved pre-installed titles worldwide in November. On the smart device front, Super Mario Run, a new action game featuring Mario optimized for smart devices, is set to launch globally in December. Fire Emblem and Animal Crossing applications will follow the release of Super Mario Run in series.
We have revised the financial forecast originally published on April 27, 2016.”
“The Company modifies its financial forecast in consideration of a stronger-than-expected yen in foreign currency exchanges, sales performance for the six months ended September 30, 2016, the revision of sales prospects after the second quarter, and gain on sales of investment securities totaling 62.7 billion yen recorded as extraordinary income for the quarter since the Company’s wholly-owned subsidiary, Nintendo of America Inc., has sold a part of its ownership in the company that manages the Seattle Mariners Major League Baseball team.
Assumed exchange rates after the second quarter and at the end of the fiscal year have been revised from 110 yen to 100 yen per U.S. dollar and from 125 yen to 115 yen per euro.”
Below you can find shipments broken down by platform, including the outlook of shipments for the current fiscal year. The prediction of 800,000 Wii U Units to be shipped in the whole fiscal year (ending on March 31st, 2017) did not change from the previous release, while Nintendo actually increased the forecast for 3DS shipments within the year from 5 million to 6 million units.