Alongside this morning's shocking announcement that Nintendo would drop the price of its 3DS handheld system a massive $80 just six months after its release, Nintendo also released its fiscal first quarter earnings, and the news is more than a little grim.
Overall sales were down 50% from the same period in 2010, with a total earning of ¥93 billion ($1.2B). That led to an overall operating loss of ¥38 billion ($489M) for the company. In addition, Nintendo revised its overall profit projection for fiscal 2012 by a hefty margin, projecting a profit of ¥20 billion ($257M). That marks an 82% drop from the ¥110 billion ($1.41B) it had previously projected.
Nintendo has cited a number of factors in explaining the income drop, including stronger-than-expected yen appreciation and its upcoming sales outlook for the holiday season. Above all else though, it appears the far slower-than-expected sales of the 3DS were heavily to blame. The system only sold 710,000 units during the quarter, and 4.53 million pieces of 3DS software sold at retail. [EDITORS NOTE: This story previously said the 3DS had only sold 710,000 units "thus far," which was incorrect. It was 710,000 units during the fiscal quarter. Apologies for that mis-typed statement.]
To compare, other DS systems sold a collective 1.44 million units during the same period, while the Wii, which recently saw its own price drop and bundle adjustment (to include Mario Kart Wii) sold 1.56 million units.
Not good. They do have a chance to change this though this holiday on all fronts with games like Skyward Sword and Kirby for Wii and Kid Icarus and Paper Mario, is that coming out this year because I might buy a 3DS for that, for the 3DS.
welp maybe this means Nintendo will stop with all of the kitschy nonsense
Nintendo has printed money for years and every console (except for the wii) they've ever released has had a sluggish start. The fact that they are dropping the price is because they can. This could be to saturate the market and squash any hope for the NGP.
Not at all shocked by this. Nothing by Nintendo recently has interested me at all, there's a reason I had my Wii for less than a year.
I love how people are saying that Nintendo is doomed because of this. If the WiiU doesn't succeed then they are out of the game. Which is laughable because they still have projected profit for 2012. It's just 82% less then the profit they originally wanted. Now if they were reporting a projected loss of 82% things would be different.
I think people are not impressed by novelty of 3D enough to warrant purchasing the machine for that reason alone. Coupled with no software and I don't think it is any surprise this has not done as well as they suspected. Sure this drop may in part be due to preemptively strike at the PS Vita, but I think this is more fear than anything else. With a weaker dollar to the Yen also, who is surprised, their projected Revenue shows that they wildly over estimated what they could get away with. The Wii went to their head a little.
Software is always king...
@Legend: Worked with the DS, but I guess the fool me once thing is at work here.
Is this what has also happened to the 3D TV manufacturers? The business model looks similar with consumers seemingly over the 3D novelty despite it being forced upon them to some degree.
I also think that Nintendo iterate too quickly in the handheld space to keep profit levels up for ever. The games don't seem to have been a hit with reviewers so far either. I like the sound of the price drop enough to consider one but also worry that 2nd Gen hardware will come oh so too soon! D'oh!
The 3DS is a really good system. I wish people could past the whole "3D" thing. Honestly, I don't play it with 3D on half the time. The biggest draw is the massive amount of upcoming Nintendo titles and all the games on the store.
The price wasn't the reason nobody is buying the 3DS. How about some games? The exciting "launch window" was just another middle finger Nintendo gave to their hardcore, which is what they have been doing since they moved Twilight Princess to the Wii. The next will be 40 dollars for a Star Fox remake with no online multiplayer.
Not really because nobody makes a TV that is only 3D. So if people choose to not use the 3D it's no loss to them. 3D is just something that is thrown in with a lot of modern TVs now. That and there's no such thing as a 3D TV manufacturer, it's the same manufacturers that were making past TVs.
@mrsmiley said:
"Upcoming games" is the biggest problem.
It literally had one of the worst console launches ever, and they're rarely ever any good anyway. We're still waiting for an AAA game that isn't a remake and there won't be one until November. Everything else at E3 didn't get a release date and barley seemed to be more than tech demo's.
I'm an early adopter but I wouldn't blame anyone for waiting.
I think they are going to sell gangbusters with the new 3DS price point, but I am wondering if this will be the first time they are selling a console at a loss. If they can just slash $80 of a 250 dollar console and still make a profit, they were seriously ripping people off before.
I am considering picking one up in august, my son recently broke our DS.
If they increase battery life I might buy it... but doubtful.