Nintendo Q2 FY16 financial results
Nintendo has reported its earnings release for the second quarter of fiscal year 2016.
First, here’s a look at hardware for the quarter:
Getting down to some of the nitty-gritty:
And some analysis and comments from Nintendo:
During the six months ended September 30, 2016, we saw strong trends for the global release of Kirby: Planet Robobot. On the hardware side, Nintendo 2DS saw sales growth. The release of the smart device application Pokémon GO led to increased sales of software in the Pokémon series released in the past and drove the Nintendo 3DS family hardware sales growth, particularly outside of Japan. The sales volume for hardware this period was 2.71 million units (19% increase on a year- on-year basis), while software held steady with the previous year at 19.23 million units sold.
For the Wii U console, we have decided to ship 0.8 million units this fiscal year, based on our forecasts of comprehensive demand for Nintendo hardware. Activity has conformed to our expectations from the start of the fiscal year, with hardware sales volume of 0.56 million units (53% decrease on a year-on-year basis). There were no hit titles this period to compare with Splatoon and Super Mario Maker last year, so the software sales were 8.3 million units (33% decrease on a year-on-year basis).
As there were few new software titles offering amiibo functionality, amiibo sales were reduced to 3.8 million units for figure-type and 1.7 million units for card-type. In addition, there were relatively fewer offerings of downloadable content during this period, so download sales were down on the same period last year. Along with this background, we felt the impacts of a strengthening yen, resulting in an operating loss of 5.9 billion yen against net sales of 136.8 billion yen (of which overseas sales were 97.3 billion yen or 71.1% of the total sales). We have also included 12.0 billion yen of share of profit of entities accounted for using the equity method related to The Pokémon Company and other companies, but we incurred foreign exchange losses totaling 39.9 billion yen, resulting in an ordinary loss of 30.8 billion yen. However, due to the sale of part of our ownership in the company that manages the Seattle Mariners Major League Baseball team, we recorded gain on sales of investment securities totaling 62.7 billion yen as extraordinary income, meaning that profit attributable to owners of parent was 38.2 billion yen.
For the Nintendo 3DS system, we are planning global release of the latest titles in the Pokémon series, Pokémon Sun/Moon, in November, as well as the Nintendo 3DS version of last year’s major hit for Wii U, Super Mario Maker for Nintendo 3DS, in December. We also have a range of strong third-party titles expected during this year.
We have also revealed that our new-concept gaming system, previously referred to using the development codename NX, will be released under the official name of Nintendo Switch. Nintendo Switch offers a wholly new concept as a home gaming system that can switch between different styles of play. We are planning to release it worldwide in March 2017.
We are also bringing back the NES home consoles that were popular in the 1980s in a palm-sized version. Nintendo Entertainment System: NES Classic Edition will launch with 30 well-loved pre-installed titles worldwide in November.
On the smart device front, Super Mario Run, a new action game featuring Mario optimized for smart devices, is set to launch globally in December. Fire Emblem and Animal Crossing applications will follow the release of Super Mario Run in series. We have revised the financial forecast originally published on April 27, 2016. For details, see the Notice of Full-Year Financial Forecast Modifications issued today (October 26, 2016).
