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Nintendo posted some pretty devastating news today: they've lost... they've lost a lot of money. Droopy eyes and saggy cheeks probably filled up the boardroom atmosphere at the Big 'N's headquarters, as news dropped that the profit they thought they were getting turned into losses they now have to live with.
Joystiq has a fair rundown of the stats, recounting the fiscal results that saw the Japanese titan drop from the projected ¥920 billion down to ¥590 billion. As far as conversions go, that's $8.8 billion and $5.6 billion respectively.
The software drought for the Wii U throughout 2013 really hurt its sales momentum, as the first three quarters of 2013 saw the system move only 460,000 SKUs. We often reported on the slow sales pace of the Wii U and how abysmal it was doing on the market.
The company sent out to the public this somber message...
“Software sales with a relatively high margin were significantly lower than our original forecasts mainly due to the fact that hardware sales did not reach their expected level. As a result, the total of selling, general, and administrative expenses will surpass gross profit, which leads to an operating loss.”
Nintendo, however, revealed that the final quarter of 2013 saw a massive shift in sales momentum thanks to a strong holiday line-up and an increased marketing presence throughout the fall season, leading to them moving 2.34 million units over the span of a couple of months. That's well over two-thirds of the Xbox One's 2013 launch sales.
Nintendo – in spite of having to cut down forecasts and lower projections – still has high hopes for the sales of the Wii U throughout 2014. They have some of the biggest franchises planned for release, including Super Smash Bros. U and Mario Kart 8.
In fact, Nintendo believes that they can shift 6.2 million units by March, coming off the massive holiday momentum. That's just over a million units than where they stand at the moment, and that gives them just over two months to do so. Given that they moved two million SKUs from October to December, I don't think it's so far fetched that they could gather an extra million over the course of two months.
The main thing is that a lot of people see Nintendo's numbers, and the accompanying forecast, and think “Man, Iwata is failing. Nintendo is dead!”
However, a few things to keep in mind: The Nintendo 3DS was the best selling dedicated gaming device of all of 2013. Iwata helped bring that money maker to the forefront of the company. The Wii literally won the seventh gen of gaming, outselling both the Xbox 360 and PS3 by sizable margins. The Wii U may have gotten off to a rough start, not unlike the Nintendo 3DS, but there's no reason to believe that it can't pick up the sales in the same way that the 3DS did after it got off to start about as rocky as Bill Clinton's marriage to Hilary after the stains on Lewinsky's dress went public.
Remember back in 2011 when all that doom and gloom was poured over Nintendo with the 3DS? Remember reports like this from Revert to Saved, where everyone was dumping on Nintendo like a bunch of people who bought toxic burritos from that corner stand from that shady guy in East LA? Well, in just two years the 3DS went from a joke to jock, and now it's got everyone else down on their knees in front of them.
Essentially, Nintendo could use the 3DS as financial leverage until the Wii U picks up its breeches and starts selling out like Nintendo's previous successes. One thing is for sure, everyone will be watching the weekly and monthly sales of the Wii U leading up to March like a mother watching her daughter while passing by pimps in San Fernando Valley.