Wednesday, May 7, 2014

The bad times are getting worse at Nintendo

The bad times are getting worse at Nintendo.

The company posted a $228 million net loss for its fiscal 2014 year (which ended on March 31). That reverses 2013's profit of $71 million.

Hardware sales were to blame, and the Wii U was a major contributor to the problems. The company's flagship console sold just 2.72 million units last year and has life-to-date sales of just 6.17 million. To put things in comparison, the PS4, which was released one full year after the Wii U, has already topped 7 million units sold.

Just how bad is that 2.72 million? Consider that in late January, the company slashed its sales forecast for the system from an unrealistic 9 million units to 2.8 million -- and it still failed to hit that drastically lower target.

Software sales also fell slightly short of their reduced target, coming in at 18.86 million.

"The Wii U business as a whole showed slow growth," the company said in perhaps the most blindingly obvious statement to ever grace an earnings report.

The 3DS, which has been a savior for Nintendo in recent years, disappointed as well, selling 12.24 million versus a projected 13.5 million units.

3DS software also fell a bit short, but there were some standouts in that category. Pokémon X and Y sold 12.26 million units, Animal Crossing: New Leaf sold 3.8 million copies last year, bringing its life-to-date sales to 7.66 million units, and Luigi's Mansion: Dark Moon, Mario & Luigi: Dream Team and The Legend of Zelda: A Link Between Worlds all saw sales top 2 million.

Nintendo is vowing to return to profitability next year and is setting more reasonable targets. The company said it expects to post revenues of $5.81 billion and profits of just under $197 million.

It's still upbeat on the Wii U as well, saying it expects to sell 3.6 million more Wii U systems by March 31, 2015, largely on the strength of long-awaited upcoming games like Mario Kart 8 and Super Smash Bros.

Source Yahoo Games

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