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Nintendo posts huge $500m operating loss as Wii U sales slump

Sam Loveridge

by

Wii U

Nintendo has posted a staggering $500 million operating loss due to slow Wii U sales.

Marking the third consecutive annual operating loss for the company, Nintendo revealed a 46.4 billion yen operating loss ($456 million or £268 million).

Nintendo predicted an operating loss of 35 billion yen for the fiscal year, so these figures are far worse than predicted.

The company’s net loss was 23.2 billion yen (£134 million), which is down from last year’s net income of 7 billion yen (£41 million), and net sales were down 10 per cent from the year before.

All these can mainly be attributed to the Wii U, which fell short of Nintendo’s already reduced sales forecasts of 2.8 million. Actual sales only managed to reach 2.72 million units, while software sales peaked at 18.86 million for the year.

Of this total sales figure, only 55,000 software sales were made throughout the whole of Europe.

“The Wii U hardware still has a negative impact on Nintendo’s profits owing mainly to its markdown in the United States and Europe, and units sales of software, which has high profit margins, did not grow sufficiently,” said Nintendo in a statement.

“Wii U still faces a challenging sales situation. Nintendo will focus on efforts that seek to stimulate the platform.”

Lifetime Wii U sales now stand at 6.17 million since the console was launched in November 2012.

To put that into perspective, Sony announced PS4 sales had reached 7 million between launch and April 2014 and the Xbox One sales topped 5 million within the same time period.

Worryingly Nintendo still pledges to work on the Wii U hardware, aiming to “enrich the value” of the GamePad. Apparently the plan is to “utilise its built-in functionality as an NFC reader/writer” and the company will “seek to supply high quality games on a continuous basis.”

What’s potentially more ridiculous is that Nintendo foresees Wii U sales actually increasing in the year ahead, with sales forecasts pegged at 3.6 million units by March 31 2015.

Read more: Nintendo 2DS vs 3DS vs 3DS XL

Via: Nintendo

Christian Harris

May 7, 2014, 3:43 pm

For what it's worth, I think Nintendo still makes some of the best games out there. If I was on the company's board, I'd pitch becoming a software only company. The company would also still make a ton of money through merchandise.

Evan

May 7, 2014, 4:57 pm

It certainly does still make great games. I think Nintendo also has the ability and finances to create great hardware but it needs to accept when a product has not resonated with the public and stop trying to force it. It can waste an awful lot of resources that way and progress very little.

PJ Matthews

May 7, 2014, 6:57 pm

Just one Super Mario Bros released onto Google Play and the Apple store and I'm sure that loss would disappear. Nintendo needs to face up to the fact it probably won't survive if it keeps on going like this. Sega had the sense to call it a day after a few failures rather than see the company disappear completely.

Like you guys I agree, superb games on a poor platform.

dicobalt

May 7, 2014, 10:15 pm

I've heard that Nintendo is going to replace the WiiU with a new console named NES2. It will support 4K graphics and you can even use a mouse in FPS and RTS games. The online service will be called NES Online. Nintendo will require all online multiplayer games to support dedicated servers. Once a month you can get a free NES, SNES, or N64 game, it also comes with Netflix. One of the marketing lines is the old slogan “Now you’re playing with power!” Release date seems to be late 2016.

Amir

May 8, 2014, 12:00 pm

"What’s potentially more ridiculous is that Nintendo foresees Wii U sales actually
increasing in the year ahead"...

I disagree with the tone of the comment, Sales will certainly increase with a
strong title lineup ahead... including Mario Kart, SmashBros and Zelda. These
are proven console winners.

Also, as Nintendo is more accessible for younger players, parents may consider
a Wii U over the PS4 or Xbox XONE purely on bang-for-buck.

The comment regarding Nintendo "superb games on a poor platform" seem
to miss the point of Nintendo's strategy... in my opinion, they do seem to they
make their consoles to reflect their own gaming library (as well as trying to accommodate third party releases). So more powerful hardware would only really benefit third party games in the short-run.

To some extent, Wii U sales have been hurt by apprehensive and non-aggressive
marketing, joined with scathing internet reviews about how the hardware cannot
compare to Sony or Microsoft's offerings. The stigma around of owning this
console has put off buyers; who are missing out on a fantastic opportunity to
play the most purely enjoyable games in the market.

I have all three consoles (next gen), and my WiiU is not going Anywhere Anytime.

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