updated 07:05 am EDT, Mon April 25, 2011
Nintendo profit dives, 3DS sales strong
Nintendo's results [PDF] for the financial year ending March 31 have shown a dramatic slump in its net profit, down some 66 percent. This was on the back of net sales of $12.4 billion, which was 29 percent lower than for the same period last year. From this, it yielded a net profit of $825 million that compared poorly with the 1.36 billion it returned for the financial year ended March 31 2010, as the iPod touch and other factors begin to take effect.
However, one positive to emerge from the conference call were its sale of the 3DS hand-held console, the successor to its DS Lite, which has sold 3.61 million units world-wide since its launch late February. Along with the sales of the console, gamers purchased some 9.43 million 3DS specific titles, even thought there were few 'must have' games available on launch. Despite this, two 3DS titles cracked the 1 million sales mark.
The Wii console sold 15.08 million units world-wide, which was coupled with sales of 171.26 million Wii games. Of these, another 24 million cracked the 1 million sales mark taking the number of 1 million plus selling Wii titles to 103.
Further, Nintendo revealed to investors that its successor to the Wii console, codenamed Project Café, will be released sometime in 2012. However, this will be after March 31 as it was not included in the company's sales forecasts through to March 31 2012. Its forecasts also indicated that Nintendo expects to sell another 16m 3DS consoles over the remainder of this financial year. Nintendo also added that its production capacity has been largely unaffected by the Japanese earthquake.
The drop in Nintendo's net profit, although expected to some degree, may have been the result of at least three factors. The Wii, while initially a having an edge in its innovative motion control scheme has seen that advantage disappear with the arrival of the Move for the PS3 and the Kinect for the Xbox 360. Its lack of HD gaming and video capabilities have also caught up with it, as many more people own HD TV's than when it launched, while its pricing advantage has also been greatly diminished in recent times.
The iPod effect has also played a significant role in Nintendo's profit decline. The number of iOS devices is well over 100 million and with games costing significantly less on the Apple platform, while also much easier to access, this is a new front that Nintendo has had to contend with. It had successfully fended off Sony's PSP, but has struggled to counter the appeal of casual gaming on the iPod and iPhone. Further, its groundbreaking glasses-free 3DS console was delayed by several months. While it had been announced, customers who may have otherwise purchased the DS Lite more than likely held off making any purchase until the 3DS was launched.