News
Nintendo Reports Weak Wii U Sales, Cuts Projections by 2/3rds
posted on by Lynzee Loveridge
Nintendo cut Wii U sales for the fiscal year by two thirds, as the game company expects to sell no more than 2.8 million consoles by the end of March. Original projections were for nine million, but Nintendo admitted that sales were poor during the holiday season compared to the PlayStation 4 and Xbox One. Nintendo has sold approximately 3.91 million Wii U systems as of Sunday. Software sale expectations were also cut in half to 19 million.
Nintendo also cut overall sales expectations for an estimated 590 billion yen (about US$5.7 billion) compared to the original estimate of 920 billion yen (US$9.4 billion). This brings the company to an expected 35 billion yen (US$335.5 million) loss instead of the 100 billion yen profit (US$958.7 million), for an overall total of 25 billion yen (US$240 million) loss for the fiscal year.
Nintendo attributed the loss to "significantly lower" software sales over the holiday season.
"In the year-end sales season which constitutes the highest proportion of the annual sales volume, 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," Nintendo announced.
The console was still operating at a loss as of July 2013, with a total of 3.6 million consoles sold worldwide.
3DS software sale expectations were also cut to 13.5 million units instead of 18 million units. Wii game sales projections increased by 0.6 million despite the console no longer being in production.
News of declined sales hit the company's stocks on Friday, with a drop of over 15 percent. Shares are selling down 17 percent for US$14.90 each. Nintendo president Satoru Iwata held a press conference on Friday to apologize to shareholders. Iwata confirmed he will not resign from the company. The company will provide more information on its plans on January 29 and 30.
Iwata also announced the company is considering a "new business structure" that could incorporate smartphones.
"We are thinking about a new business structure," Iwata said. "Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business."
Thanks to Daniel Zelter for the news tip
Sources: Reuters, Bloomberg, The Wall Street Journal via Gamespot (Link 2, Link 3, Link 4)
