The times, they are a-changin'. Nintendo started out this console generation posting record profits thanks to its runaway success with the Wii, coupled with the immensely popular Nintendo DS family of handhelds. Now as we enter 2012 it seems the house that Mario built is forecasting its first annual financial loss in over 30 years, and the first loss since Nintendo became a video game powerhouse.
[Note: all figures in parenthesis are in Canadian dollars]
During Nintendo's financial brief for investors, the company announced a revision of its expected net annual loss from ¥20 billion ($262M) to a staggering ¥65 billion ($851M). This bad fiscal news comes one quarter after Nintendo flipped its projected ¥20 billion profit to ¥20 billion loss.
For the third quarter ending December 31, Nintendo has posted a ¥48 billion ($629M) loss, as compared to a net gain of ¥49 billion ($642M) during the same period last year. To show how dramatic net income on Nintendo's books is falling, net income during the company's first three fiscal quarters has dropped five years in a row -- from ¥259 billion (3.4B) profit during fiscal 2008 to the ¥48 billion loss just recorded for fiscal 2012.
Net sales for the nine months ending December 31 were ¥556 billion ($7.3B), as compared to ¥807 billion during the same period last year. This represents 31% loss in net sales year-over-year for Nintendo. Here are the comparison sales figures, broken down my region, for the first nine months:
Net Sales nine months ending Dec. 31, 2011: ¥556 billion
Japan - ¥120 billion
Americas - ¥214 billion
Europe - ¥194 billion
Other - ¥26 billion
Net Sales nine months ending Dec. 31, 2010: ¥807 billion
Japan - ¥128 billion
Americas - ¥378 billion
Europe - ¥256 billion
Other - ¥44 billion
Looking at the numbers the biggest loss is in the Americas where net sales dropped ¥164 billion ($2.1B), while sales in Japan have only decreased slightly.
While the numbers look grim, during the investor call Nintendo president Satoru Iwata was quick to point out that while forecast numbers are falling, the company is seeing strong momentum with their Nintendo 3DS portable and gave a "year-end season" release window for their next gaming platform, the Wii U.
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