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

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

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