Nintendo misses FY2013 profit forecast by 50 percent

Nintendo misses FY2013 profit forecast by 50 percent

Summary: A weaker yen helped lift Nintendo back to profit for the fiscal year ending March 31, but it misses its forecast of 14 billion yen (US$142 million) following worse than expected sales of its latest game console Wii U.

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Nintendo has missed its profit forecast by half largely due to disappointing sales of its latest game console Wii U.

wii U
New titles this year are expected to help drive sales of the Wii U. (credit: Nintendo)

For the fiscal year ending March 31, 2013, the games console giant posted a net profit of 7.1 billion yen (US$71 million) below its forecast of 14 billion yen (US$142 million), according to results released Thursday. In the previous year, Nintendo had made a net loss of 43.2 billion yen (US$434 million)--its second straight annual loss. For FY13, sales dipped 2 percent dip to 635.4 billion yen (US$6.3 billion).

"Wii U was not able to maintain the initial sales momentum after the beginning of 2013 due to a delay in the development of subsequent software titles [after its launch in November]," said the company in a statement. It added 3.45 million units of the new console were sold worldwide.

The Wii U, the successor of its popular 7-year-old Wii console, features a touchscreen controller enabling two-screen gameplay.

Satoru Iwata, president of Nintendo, expects new titles to help drive console sales this year. He estimates the company will sell 9 million Wii U consoles and 18 million 3DS players this fiscal year, as it introduces top Japanese titles such as "Animal Crossing: New Leaf" in overseas markets.

Nintendo expects net profit to pick up to 55 billion yen (US$553 million) for the next 12 months. It reiterated a 100 billion-yen (US$1 billion) operating profit target. This follows an operating loss of 36.4 billion yen (US$366.4 million) for FY13.

Topics: Hardware, Tech Industry, Japan

About

Loves caption contests, leisurely strolls along supermarket aisles and watching How It's Made. Ryan has covered finance, politics, tech and sports for TV, radio and print. He is also co-author of best seller "Profit from the Panic". Ryan is an editor at ZDNet's Asia/Singapore office.

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8 comments
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  • Dream on Iwata. xbox has crushed you like

    Godzilla stomping on a commuter train.
    Johnny Vegas
    • Xbox?

      The PS3 was released 12 months later than the XBox 360 and yet overall sales of the PS3 are higher - and Wii sold far more than either. I doubt that XBox has "crushed" anything.
      Wakemewhentrollsgone
      • Xbox and PS3 are about even worldwide in sales...

        and the Wii does crush sales of both buy about 20 million units.
        aretaksonic
        • Units - maybe

          I will believe the units sold, but games and loyalty are more telling.

          Nintendo has been a generation behind for years now. When they are only selling consoles to non-gamers who use it for a few months, and it then collects dust, their business model isn't sustainable.
          thenitewatch@...
      • Umm

        That was true until the whole hacking incident and Sony lost the market share with that flub.

        As for the Wii, where are the good games?

        360 is okay but, wasn't without faults.
        slickjim
        • Wii Games?

          Wii's good games? On my shelf :) The Wii had some amazing titles. I will be buying a Wii U soon too :) Lots of potential. And I'll lay down the money even if it's just Nintendo's first party games I get! Worth more than any of Microsoft's first party crap :)
          Dave Clements
  • Game consoles are not going up

    I can see a shift in consumers habits.
    AleMartin
  • My suspicion...

    Xbox and Playstation will continue to battle it out for the living room (or more likely, the basement man-cave). Nintendo's future lies in kid friendly gaming handhelds.

    There's definitely a nice for hand-held gaming systems aimed at kids who are too young to own a smartphone (aged 5 to 12). Anyone who's got kids that age knows that long car trips and doctor's office visits would be a nightmare without them. Nintendo currently has a firm grip on this market segment. The task that lies ahead is maintaining that grip. The most logical/likely challenge to Nintendo's dominance will probably come from an upstart company producing an Android based device, and offering a curated market of $.99 cent to $5.00 kid-friendly titles. With 3DS titles selling for $30.00-$50.00 this could prove a powerful challenge. I hope Nintendo executives have contingency plans in place.
    dsf3g