Reporting financial results for the ending of the fiscal year to investors is a lot like taking the last report card of the year home and showing it to your parents. Both have the feeling of dread that you know that you the the best you could through out the year, but somehow it wasn’t enough. You worked your, pardon the expression, ass off and even did extra work that was not even needed. But for some reason you fell short, and now you have to face the wrath of the people who are in charge of you and explain what happened. This is the case for Tatsumi Kimishima, Managing Director for Nintendo and for President and CEO Satoru Iwata. First let’s see how bad did Nintendo really do for the fiscal year 2013.
At the end of last fiscal year, Nintendo ending the year with 635.4 billion yen (roughly around $6 billion USD) in net sales. At the end of this fiscal year, Nintendo had dropped 10% to 571.1 billion yen (roughly around $5 billion USD). This is a 10% drop from last year and is a difference of around 64 billion yen (roughly $630 billion USD).
The reason that Nintendo’s net sales are this low (besides a weak yen) is due to the slow growth of the Wii U and a decrease in hardware sales globally. In Japan it was predicted that the Wii U would go on to sell over 95,000 units; they only managed to sell 89,000. In the US, predictions put the number of Wii U sold at 1.5 million; the goal was missed by 200,000 and settled at 1.2 million. In the rest of the world, 1.01 million was the predicted number and 550,000 was the actual amount.
In contracts the 3DS is Nintendo’s best selling console and is the only one that beat expectations, especially in the Americas. Out of all the SKUs sold in the Americas 4.33 million were regular 3DS units, 2.59 million were 3DS XLs, and 1.14 million were the new 2DS. Combine this with the rest of the world and the 3DS has a use base at around 43 million players.
Then there’s the software. For this fiscal year ending (April 2013 to March 2014), the Wii U only had five titles that past the million mark, with overseas sales making the bulk of the money. These games were New Super Mario U(2.17 million), Super Mario World 3D (2.01 million), New Super Luigi U (1.76 million), Wii U Party (1.35 million) and The Legend of Zelda: The Wind Waker HD (1.22 million). Now compared to the 3DS software, ten titles past the million mark, again with the majority of the sales being from overseas. The games that past a million on the 3DS were Pokemon X/Y(12.26 million), Animal Crossing New Leaf (3.8 million), Luigi’s Mansion: Dark Moon (2.76 million), The Legend of Zelda: A Link Between Worlds (2.51 million), Mario & Luigi Dream Team (2.08 million), Tomodachi Life (1.85 million in Japan only so far), Mario Kart 7 (1.54 million), Donkey Kong Returns 3D (1.52 million), New Super Mario Bros 2 (1.40 million), LEGO City Undercover (1.19 million), and Mario Party Island Tour (1.14 million). Do note that these numbers are reflective of this fiscal year ending on March 2014 and is not the life to date numbers.
So what do all of these number mean? Well for one it means that Nintnedo needs to step up their game (no pun intended) when it comes to pushing Wii U hardware and software. Mario is an iconic figure and everyone loves him, but Nintendo can not continue to rely on him to push hardware like in days past. And no swapping Luigi for Mario for one year doesn’t count. Gamers want more Samus, Link, Donkey Kong, Kirby and a ton of other characters from Nintendo’s library of characters.
Now for the 3DS, it seems that as long there is a Pokemon game every few years, the system will thrive. Until then the 3DS shows that there is a wide range of games that gamers can enjoy that are first party and third party. Still they could push more third party games when Pokemon eventually runs it course.
Now with the numbers out of the way, how will Nintendo make it’s comeback? In the second part of Nintendo’s Financial Results Briefing Overview, we will take a look at what Iwata has planed, look at the games that will try to convince gamers to buy a Wii U and be introduced new avenues that Nintendo is taking to bring back gamers to Nintendo.
Source: Nintendo Consolidated Results for the Years Ended March 31, 2013 and 2014, Nintendo Financial Results Briefing for Fiscal Year Ended March 2014
