Do Not Pass Go, Do Not Collect $200 Dollars! Poor Nintendo, they’ll rebound though.
It’s hard to believe, but Nintendo is one of the most financially secure company’s in the world, and has carefully manipulated and strategically played the market to maximize profits. In fact Nintendo is the only company that makes sure that it sells each system it releases for more than it cost the company to make the system, which has caused Nintendo to make bucketloads of cash (more like islands worth :P).
That trend was broken with the Nintendo 3DS however after it had an extremely rocky start, causing Nintendo to slash the price of the system from it’s high of $250 at launch to a mind-boggling $180 only months later.
However the 3DS has picked up substantially since the holiday of last year in terms of sales and interst, and the 3DS system is on track to have a MUCH better performance than it’s predecessor, the original DS… and that’s saying something as the DS is one of the best-selling systems of all time life-to-date.
The 3DS so far has sold over 5 million units (the original DS sold only 2.3 million) in its first year and has sold 9 million videogame copies with over 100 titles available (compared to 5 million with the DS from 58 titles). And that’s not even counting the over 500 games available for the digital Nintendo eShop… whereas the DS launched with no digital store available! The average 3DS consumer has downloaded at least 5 titles… Last but not least, the 3DS has generated over $1.2 billion dollars in revenue already, whereas the DS had generated only $540 million in the same amount of time! QUITE THE DIFFERENCE!
As for Nintendo’s first ever yearly loss, the company saw a 36% drop in hardware and software sales year-over-year, with a 36% drop in revenue. That equaled up to a loss of $458 million (¥37.3 billion in Yen, the Japanese currency) in sales…
Thankfully the Wii U will be launching this year to replace the Wii and usher in the next-generation! Nintendo will be the first manufacturer with two next-gen systems on the market (the 3DS and the Wii U) and that should help spur sales and interest in Nintendo products immensely, especially given that the next Xbox and next PlayStation systems are not likely to hit until 2013 at the earliest. As such, Nintendo expects that they will turn a profit by this September 2012, leading a return to profit for next year. And believe-you-me, this has been a harsh lesson for Nintendo who is unlikely to put themselves in the same position ever again, as having to announce their first ever annual loss must have been a very bitter pill to swallow for a very proud Japanese company who was on top of the world with sales at the height of the Wii’s success. Seeing the Wii fall so low will only improve how the company does business in the future.
Game-wise, Nintendo expects for sales to be improved thanks to the likes of New Super Mario Bros. 2 for the 3DS this August, Animal Crossing 3DS this Fall, a new Brain Training game this Summer, strong and extended Nintendo Network programming and digital releases, upcoming DLC for their games and the release of their next console, the Wii U.
Here is a video analyzing what we know of New Super Mario Bros. 2 for 3DS.
