Nintendo Will Sell Wii U at a Loss

joshuaboy

Earnings forecast lowered as sales fell 6.8% compared to last year.


Nintendo has cut its profit forecast following weaker than expected sales in the first half of this fiscal year, lowering its projections for 3DS software sales by 4.1% and confirming that Wii U will be sold at a loss. Nintendo revealed that 22.19 million 3DS systems have been sold since the system launched in 2011, joining 97.18 million Wii systems sold to date and 152.5 million Nintendo DS systems.

"Sales of the Nintendo 3DS hardware and software were weaker in overseas markets than expected," Nintendo said in a statement. "In addition, the yen appreciation was beyond the expectation level and the exchange losses totaled 23.2 billion yen" (roughly $290 million).

Nintendo CEO Satoru Iwata reduced the net income forecast for the full year, revealing that net income for the fiscal year may be 6 billion yen (roughly $75 million), compared to the previous estimate of 20 billion yen (roughly $250 million). Overall, sales for the first half of the fiscal year fell 6.8% compared to 2011, with Nintendo earning 201 billion yen (roughly $2.5 billion) compared to last year’s 215.7 billion yen (roughly $2.7 billion).

Nintendo said it hopes to sell 5.5 million Wii U consoles this fiscal year, and senior managing director Yoshihiro Mori confirmed that Nintendo will take a loss on each system sold. “Manufacturing costs are expensive, and we priced the machine at a level customers would accept,” Iwata said. “It’s important for us to develop a healthy business next fiscal year by combining sales of hardware and software.”

Nintendo has seen multiple losses lately, missing sales estimates in April and posting a $220 million loss in July. Last year, Nintendo posted a $924 million loss.

Nintendo announced a price drop for Wii earlier this month and revealed two new Wii bundles this morning. Wii U will launch on November 18th.

Source: Bloomberg

focus

And yet you still have people who think M$ and Sony will be launching some kind of "super machines" next year that will blow Wii U out the water when in fact everything (cost, logistics, sales trends, technology) all say otherwise.

I saw M$ expanded their subsidizing program this week. That would be the only way I see it happening. Nobody can launch at more than $400 - $450 next go round.

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