Tue. May 30th, 2023

Transitioning from one hardware generation to the next is never an easy time for a console maker’s balance sheet as sales of the old system begin to decline and the investment in a new system has yet to pay off. Still, there are signs that Nintendo is handling the transition worse than expected.

The company today reported financial results (pdf) for the quarter ended June 30, which showed revenues were down nearly 10 percent from last year, to ¥84.8 billion (about $1.08 billion). And while the ¥17.2 billion ($220 million) net loss for the quarter was actually an improvement on last year’s performance, it’s still a worrying sign for a company that had been consistently profitable for decades until last year. used to be.

The main culprit remains the drastic drop in sales of its most popular console. Nintendo sold just 710,000 Wiis in the three-month period from April to June, less than half of the 1.6 million it moved in the same period last year, and much lower than the record pace set a few years ago. Nintendo is counting on a strong Wii U launch to help turn things around: the company expects its two home consoles combined to sell more than 10.5 million units for its fiscal year, which ends in March.

Things are looking better on the 3DS front, where sales for the quarter were up to 1.9 million units, much better than the 710,000 units sold at the original $250 price point in the post-launch period last year. There are now more than 19 million 3DS systems worldwide, a number that virtually guarantees that the system will have the momentum to continue to attract decent software support in the face of stiff competition from mobile phones and tablets. The company is also optimistic about the imminent release of the supersized 3DS XL and upcoming releases New Super Mario Bros. 2 And Brain age will nearly double the installed base of the system in March.

Nintendo also said it’s getting closer to being able to sell the 3DS at a profit after last year’s drastic price cut forced the company to take significant losses on every system it sells. That situation is somewhat normal for the gaming industry as a whole, but extraordinary for Nintendo. The ultimate profitability of the transition to 3DS hardware should help the company’s bottom line quite a bit, which will help as it continues to try to navigate an incredibly difficult transition period.

By akfire1

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