THE BUZZ: Nintendo has released their financial results for the first half of fiscal year 2011, and the numbers aren’t pretty. The company’s loss for that time period came in at 107 billion yen, which when reduced by future tax credits, comes in at a net loss of 70.2 billion yen (with 57.3 billion yen of that being operating loss). That loss, roughly converted, comes in at around $924 million dollars—or just shy of $1 billion.
For the first half of the 2011/2012 fiscal year, Nintendo sold (worldwide) 2.58 million DS units, with 28.99 million units of DS software; 3.35 million Wii units, with 36.45 million units of Wii software; and 3.07 million 3DS units, with 8.13 million units of 3DS software.
The company is forecasting the following sales numbers for the entire fiscal year: 6 million DS units (down from 11 million), 12 million Wii units (down from 13 million), 16 million 3DS units (same as previous projection), 62 million units of DS software (down from 67 million), 100 million units of Wii software (down from 120 million), and 50 million units of 3DS software (down from 62 million).
EGM’s TAKE: While a loss of $924 million might seem like a lot of money to lose—and, really, it is—that number doesn’t instantly mean doom and gloom for the company. Unfortunately for Nintendo, the Yen is still outrageous strong against the Dollar and Euro, which is a major cause for a decent amount of that loss. As well, research & development on the Wii U no doubt also factors in to the operating loss numbers.
Of course, other elements do come into play—such as the lackluster performance of the 3DS compared to Nintendo’s projections for how it would be doing. However, since the price cut, the 3DS has been selling far stronger and no doubt making up for some of that lost ground.
Still, this large of a loss isn’t good for the company, and time will tell what kind of effect it has on their business practices. With such losses coming into play via their overseas efforts, it’s always possible that Nintendo may continue to beef up their Japan-only game releases, while letting third parties bear more and more of the responsibility for software in territories such as North America and Europe.