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Nintendo cuts Wii U, 3DS sales projections for full fiscal year
Nintendo cuts Wii U, 3DS sales projections for full fiscal year
January 30, 2013 | By Mike Rose

January 30, 2013 | By Mike Rose
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    21 comments
More: Console/PC, Business/Marketing



Nintendo has been forced to cut its hardware sales projections for both the Wii U and the 3DS, following lower-than-expected sales in the last fiscal quarter.

The company had originally projected that it would sell 5.5 million Wii U consoles during the fiscal year ended March 31, 2013 -- however, it has now cut that figure down to 4 million.

As for the 3DS handheld, Nintendo now expects to sell 15 million units during this fiscal year, compared to its previous estimate of 17.5 million. The Nintendo DS is expected to sell 2.3 million units during this fiscal year, down from previous expectations of 2.5 million.

Notably, however, the company has in fact raised its profit projections for the full fiscal year. Where it had originally slashed its profit estimates to 6 billion yen ($75.2 million), the company now expects to see profits of 14 billion yen ($153.8 million). The company put this return to profitability down mainly to foreign currency exchange gains.

At the same time, Nintendo has cut its revenue projections for the full fiscal year, down to 670 billion yen ($7.4 billion) from the previously estimated 810 billion yen ($8.9 billion).

For the nine months ended December 31, 2012, Nintendo posted revenue of 543 billion yen ($6.0 billion), down 2.4 percent year-over-year, and profits of 14.5 billion yen ($159.7 million), compared to losses of 48.3 billion yen ($531.6 million) year-over-year.

Hardware and software sales

The company was happy to release plenty of sales statistics for both Nintendo hardware and software during the last nine months.

New Super Mario Bros. 2, released last year for the Nintendo 3DS, has now sold 5.96 million units worldwide, while Animal Crossing: New Leaf on the 3DS has sold 2.73 million units in Japan alone in just two months.

Overall, the Nintendo 3DS has now sold 12.71 million hardware units worldwide during this fiscal year, and 39.56 million software units.

Meanwhile, Nintendo Wii U software figures were also noted. New Super Mario Bros. U has sold 2.01 million units, while Nintendo Land sold 2.33 million copies.

As for the hardware, there are now 3.06 million Wii U consoles sold worldwide, and 11.69 million software units.

In comparison, the original Nintendo Wii console sold 3.53 million hardware units during these nine months, while 45.08 million software units were sold.


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Comments


Joe Zachery
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There is a error here!
"Overall, the Nintendo 3DS has now sold 12.71 million hardware units worldwide, and 39.56 million software units."
The 3DS has sold over 9 million alone in Japan. So are you saying that the 3DS has only sold 4 million across the US and Europe. Ya very unlikely please fix if you have the real numbers.

Mike Rose
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Hey Joe,

apologies, I obviously wasn't clear enough - I meant that 12.71 million units have been sold during this fiscal year. I've updated the text to reflect this.

Christian: The Nintendo 3DS had sold 22.2 million units worldwide by September 2012, according to Nintendo's previous earnings report: http://gamasutra.com/view/news/180025/Weakened_3DS_sales_lead_to_
lower_forecast_for_Nintendo.php#.UQkATmfhJ8F

Cheers
Mike

Merc Hoffner
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Problematic. And interesting. Cutting console sales forecasts while raising profit projections indicates losses per console (as we knew). If we were to consider the change in 3ds sales expectations negligible (it isn't), and the changes in software sales negligible (it probably isn't), then selling 1.5 million fewer Wii Us results in a $78 million gain, resulting in a painful, but relatively tolerable loss of about $50ish dollars per machine on average. Now we have some better idea of the hardware costs.

Also, even accepting bundling and pack-ins, a tie ratio of 3.8 is relatively high this early in the day, indicating a more core audience is buying, which is both expected and a bit troubling. Moreover, seen as there are barely that many decent games available at bricks and mortar stores (with the exception perhaps of Ubisoft, 3rd party's hardley brought their 'AAA' game, so to speak), I wonder if 11.69 million software units sold includes downloadable games, which would potentially indicate an even more core audience, given the early days of getting consumers online.

Michael Pianta
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Why would a more "core" audience buying the system be troubling? Surely the system was partially intended to entice those exact consumers?

Merc Hoffner
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Because they made a great business out of the non-core and lapsed gamer, which at that time had minimal competition and was un-tapped. Let's be clear - they want to replicate the success of the Wii, they want the 'casual' gamer, and they want it early, because early noise creates zeitgeist that drives further adoption. Hitting core gamers means you're competing for existing markets. Hitting non-traditional markets means you're breeding into new territory and generating true market growth. If we look through the history of the console space, I think it's more a story of building a huge base out of an excited new-gamer audience phenomenon and hardening a core from it, rather than taking the core and growing the market out.

But obviously it would be nice to keep the core market onside too. As we've seen it's more difficult for Nintendo to compete in a core-only market in part because their studios aren't suited to the concentrated core experience, and part because the 3rd party industry has a tacit 'don't bother with Nintendo' policy. And if Nintendo didn't sufficiently service the 'non-core' console market, who exactly would? The console space would be turning ever inward, more and more exclusive and focused on a handful of high end genres - the financial risks would choke diversity and creativity, cultivating disenfranchisement. A pretty dangerous recipe for general survival, as we've seen through the losses and collapses of so many studios this gen.

N.B. I personally still think the idea that social and mobile gaming has somehow consumed the 'casual' gamer's dollar is a fallacy - people were wasting time on solitaire etc. long before facebook (and on facebook throughout the success of the Wii), and the mobile scene is unintelligible to the elderly, unaffordable to the young and certainly no displacement for the need to have fun with friends/family in a room (and the mobile gaming boom had no affect on the handheld scene years ahead of the west in Japan).

kevin Koos
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In comparison, the original Nintendo Wii console sold 3.53 million hardware units during these nine months, while 45.08 million software units were sold.

Don't you mean three months not nine months?

Michael Pianta
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I'm not concerned for Nintendo. I expect they will wind up doing better than many naysayers expect, while certainly not matching the performance of the Wii (which was clearly an anomaly). Comparing this to the Wii is in some ways not that informative - instead it might be interesting to compare it to the GameCube.

Ian Uniacke
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@Cameron: That's not correct at all. Disruption theory predicts that the initial sales of the disrupting technology are very low and designed for a niche market: this is why competitors dismiss it until it's too late. The classic example is compact hard drives, which were seen as expensive per MB. Only a few people bought them so the hardware vendors were all convinced they were a dead market. The problem was that the few people that were buying them were early lap top adopters and as that market grew, companies that had invested in that market grew with it at the expense of other companies.

Nintendo have even STATED that the explosive sales of the wii was completely unexpected and they were not prepared for it. (I don't have a reference for this unfortunately).

Andrew Chen
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@Ian: One sure way we know Nintendo was not fully prepared for the success of Wii...that sucker was supply-constrained for years!

@Everyones: Can we really say the industry was disrupted however? Their strategy with Wii may have been disruptive (i.e. targeting under-served customers with low-end "good enough" affordable tech) but scanning the market today I see that the competition remains in roughly analogous positions and in fact has even co-opted some of that disruptive "swagga" with subsequent products like Kinect (not so much Move). Much of the market that their disruptive play created has so far been MIA for their new product.

IMO, Nintendo now looks to be in nearly as precarious a position (searching out its place in an uncertain market that has somewhat written it off) as it was in 2006. Cameron, what decisions do you think the company could have made to stay "on the Path"?

Andrew Chen
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@King Cam: Thanks for elaborating. While I can understand the motivation for simplifying the current product (i.e. it may over-serve the majority potential userbase) I think going that route in THIS current market would end up not satisfying anyone.
Mobiles and pads are offering very low-end but good-enough-for-many game experiences at unbeatable prices, and soon may gain connection to a home's main screen. The risk of over-serving is there, yes, but to undershoot this time when the low-end competition is rapidly iterating and improving is also extremely dangerous.

I guess this is a roundabout way of saying I feel the controller is less the issue this time (though cost still is). The under-served market that Wii tapped into have good-enough alternatives in some of those "expanded audience" software offerings. Maybe fitness and even a good music game could still cause some ripples? A bring-the-family-together title like Nintendoland doesnt seem to have stoked any major fires, though that could very well come down to cost and crap marketing (the game itself looks like a good value to me!)

Agree totally on the bloated OS and sluggish User Experience. This at least we know will improve in the near future (Spring and...summer?!) Tho everyone can justifiably say "shame on you Nintendo", it is consistent with a company taking its OS baby-steps!

John Gordon
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I surprised New Super Mario Bros. U sold almost as much as Nintendoland considering the latter was bundled with most of the systems that were sold. It makes me think the console would have sold better if they had bundled Mario instead.

John Flush
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And I think it would have sold even better if the NSMB U reviews would have said, "You know all those things you hated about the first one's multiplayer, they fixed them!" instead they say it is the same game with a 5th player.

That, hands down, killed my interest in the system for a while. That and motion controls are still an expected requirement of the games deployed on the system. Meh, not for me.

John Gordon
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@ Jefferson Soler - I agree with that too. Most people are only buying the Deluxe bundle. They should have had only that one bundle, and that one bundle should have had Mario instead of Nintendoland.

GameViewPoint Developer
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They need to get those new games (Mario Kart etc) out as quickly as possible.

A W
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Nah... Just announce a date for that X game, and finish that HD Wind Waker Remake.

Johnathon Swift
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*Writes "The End of Nintendo" blog post months ago, gets yelled at over the internet. Months later Wii-U begins it's descent towards failure. Dances.


But no, I shouldn't dance just because I was right. Everyone should want competition, Microsoft has little enough as it is with continuously adding ads to their dashboard and etc. Besides, I want that Zelda re-make now. Just not sure what Nintendo can do to really get back in it. They can possibly save themselves from a complete disaster if they really push it (price cuts, games, etc.)

Johnathon Swift
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"Nintendo cuts forecast for it's systems and scrambles to give customers reason to buy. But ignore that, they posted a profit from a majorly hyped console launch this year versus the rapidly declining console sales and huge expenses of preparing a new console launch of last year, YAAAAY!"

Of course they did! They sold 3 million Wii-U's with a good attach, 3DS sales picked up, and they've slashed their R&D budget hugely as they're not developing a new console right now. Doesn't mean they're saved. Just watch as third party offerings vanish entirely from the Wii-U and 3DS sales over the years, and the Wii-U goes all Dreamcast on it.

Bob Johnson
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Wii U isn't getting AAA support anytime soon. But the end of Nintendo? Meh. Not when they have $10 billion in the bank. And just forecasted a small but tidy $150 million profit for their fiscal year ending this March.

Plus we already know that they only have to sell one game per Wii U to make a profit. It seems like they have positioned themselves to make money under current conditions.

Andrew Chen
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Still too early for that happy dance, Johnathon...Iwata mentioned it in his investor's call, but the company has thus far failed to communicate the new product's value proposition adequately.
Heh...now, it could be that the value proposition isn't quite there regardless, but we can give a new platform a little more time. Particularly a platform that has yet to see Wii Fit, Mario Kart and Hideki Kamiya-developed Amazing Starfox (wishful thinking, that). Heck, unlikely as it may look now, maybe TVii can catch some lightning. Maybe.

All that said, I feel like the console is uniquely well-positioned for the Japanese market:
1) A small console with family-friendly recognizable titles
2) Designed to be fairly independent of the main TV screen in space-constrained Japanese homes and that
3) Counts some of the largest franchises in the country among its exclusive offerings.

I actually think the 3rd party support will be okay for the system, but it will skew decidedly eastern.

Brian Peterson
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http://gamasutra.com/view/news/185544/Japans_bestselling_games_of
_2012_dominated_by_Nintendo.php#.UQmWGb-9a_Q

I think they'll be OK. It's interesting that this relatively negative article about Nintendo got a bunch of comments, while the positive one from two days ago still has 0 comments at this time. Assuming that more comments indicates more traffic, it's no wonder why "Nintendo is doomed" is the more common article to see on other gaming news sites.

Andrew Chen
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Just as someone said "Man cannot subsist on bread and water alone" now we can say "A Console Maker cannot subsist on the Japanese Market alone".

...No really, the population is contracting and skewing ever-older!

More seriously, it is great that Nintendo knows their home market so well and are doing well there but thats actually not news anymore. We've seen weekly articles to that effect, often under the headline "Weekly Japan Sales".
These fiscal reports ARE news because it gives us the window into the company's absolute performance globally. They need to do well in non-Japanese markets (needless to say much much bigger) to continue to compete and thrive.


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