Nintendo lowers sales forecast, now expects loss instead of profit
Nintendo has released its full year financial forecast modifications ahead of the end quarter report due at the end of February and with one quarter to go after this month things aren’t looking well.
Nintendo has said that it now believes that it will make a loss for the 2013-2014 financial year of 25 billion yen (271 million AUD), that’s 80 billion yen (869 million AUD) down from a predicted net income of 55 billion yen (543 million AUD). A terrible loss for the company and only its second loss in the last 30 years.
Nintendo has also downgraded its predicted sales figures for the Wii U and 3DS. In April 2013, Nintendo expected they would sell 9 million Wii U consoles, now they expect 2.8 million to be sold. The Nintendo 3DS although better than the Wii U is still expected to sell less with its forecast lowered from 18 million to 13.5 million.
Software sales too have been downgraded with Nintendo predicting 66 million units will be sold as up posed to 80 million. Wii U sales already low, will be lowered further down to 19 million down from 38 million.
While the Nintendo 3DS is profitable for Nintendo now the Wii U still poses the biggest problem. Nintendo is losing money on each unit sold and was hoping to earn back those losses in software. However, if no one is buying your console then no one is buying the high margin games for them.
All of the above figures are estimates from Nintendo before its quarterly report is handed down at the end of the month.
Nintendo’s quarterly report and investor meeting will be an interesting one at the end of the month, their back is against the wall.
Source: Nintendo IR