Nintendo almost never sells its hardware at a loss. With the Wii U though, the company doesn’t have much of a choice.
Speaking during an investor’s meeting in Japan a short while ago, Nintendo president Satoru Iwata officially confirmed the Wii U will be sold at a loss.
Iwata spoke about this topic, overall profits, and more:
During the second quarter of this fiscal term, we have successfully eliminated the situation that we sell the Nintendo 3DS hardware below cost, which was the main reason our corporate profits fell in the last term. However, as we are in the phase of concentrating our development resources on software for the Nintendo 3DS system, which is still in an earlier stage of penetration than that of Nintendo DS, and as we have not yet launched the Wii U system, it is difficult to increase the total sales of software, which is generally profitable. In addition to the yen’s continuous appreciation, the Wii U hardware will have a negative impact on Nintendo’s profits early after the launch because rather than determining a price based on its manufacturing cost, we selected one that consumers would consider to be reasonable. In this first half of the term before the launch of the Wii U, we were not able to make a profit on software for the system while we had to book a loss on the hardware, which is currently in production and will be sold below cost. Our loss has therefore widened during the second quarter in spite of bringing the Nintendo 3DS hardware back to profitability. Although we expect our financial performance to be revitalized, under these circumstances, unfortunately we cannot say that we will achieve ‘Nintendo-like’ profits within this fiscal year.
We will make best efforts to retrieve “Nintendo-like” profits by:
- boosting sales of the Nintendo 3DS system as a sound successor to Nintendo DS both in Japan and overseas during the year-end sales season,
- launching the Wii U system successfully in each part of the world in the year-end and maintaining the sales momentum next year, and,
- transforming our business structure in line with the times, including the expansion of our digital business to increase our business efficiency and profitability.
Satoru Iwata spoke about the Wii U’s strong pre-orders and production of the console during an investor’s meeting in Japan a short while ago. Thanks to a transcription of the talk on Nintendo’s official website, we now have direct quotes.
First, below are Iwata’s comments on pre-orders. It has once again been confirmed that 250,000 consumers are on GameStop’s waiting list, and pre-orders are strong overall.
“Although we had not begun advertising in the mass media at that time, many pre-orders started to be placed at retailers, and now we are even hearing that pre-orders are already sold out at some stores. Of the two SKUs, it seems that the Wii U DELUXE SET, which is the high-end model, is doing better in terms of pre-order numbers. To give a nice anecdote which illustrates how well pre-orders are doing at the moment, GameStop, which is the largest specialty retailer of video games in the U.S., created a ‘waiting list’ after all of their allocated pre-orders had been sold out, and as of last week, more than 250,000 consumers had put their name and contact details on the waiting list for a Wii U system.”
The excerpt below concerns Wii U production. Nintendo believes that production capacity “will place limits on our Wii U prospects for this calendar year, but we will make every effort to supply as many units as possible, and we will strive to continue to ship Wii U hardware without any interruptions in each region even after its launch.”
“As production only started this summer, it has now become more likely that it is our production capacity, rather than consumer demand, that will place limits on our Wii U prospects for this calendar year, but we will make every effort to supply as many units as possible, and we will strive to continue to ship Wii U hardware without any interruptions in each region even after its launch. In this fiscal year we are looking to ship 5.5 million units of Wii U hardware and 24 million units of Wii U software. By the way, when we launched Wii six years ago, we shipped 5.84 million units of hardware and 28.84 million units of software in its first year. Please note that while this software sales figure includes bundled copies, the software sales estimate I have just shown does not.”
Three new Nintendo games have entered the company’s million-seller chart. Pokemon Black/White 2, New Super Mario Bros. 2, and Mario Party 9 have all reached the sales goal.
A specific breakdown of the sales is posted below.
Pokemon Black/White 2 (DS)
– 4.26 million global sales
– 2.84 million sales in Japan
– 1.42 million sales overseas
– Life-to-date sales are 4.26 million
New Super Mario Bros. 2 (3DS)
– 3.25 million global sales
– 1.31 million sales in Japan
– 1.95 million sales overseas
– Life-to-date sales are 3.25 million
Mario Party 9 (Wii)
– 1.25 million global sales
– .59 million sales in Japan
– .66 million sales overseas
– Life-to-date sales are 2.24 million
Nintendo has provided an updated release schedule as part of its financial materials.
There aren’t a whole lot of interesting listings, but it looks like Brain Age: Concentration Training has been pushed back in North America to an unspecified time frame between January and March 2013. It’s been given a vague 2013 “date” in Europe.
Wii U games are also listed for the first time. Bayonetta 2, Smash Bros., and Monolith Soft’s next game are all “TBA”, though it’s nice seeing them on there in any case!
Update: Now over, basically. You can see a more comprehensive version of the presentation through the slides posted here.
It’s that time once again! Nintendo is holding its usual investor’s briefing in Japan today, and analyst David Gibson is in attendance as usual.
We’ll round up Gibson’s tweets from the events below. I suppose you can consider this a live-blog of sorts.
– 9 of the top 20 titles in Japan are for the 3DS
– Europe/USA only has 3
– Nintendo doesn’t consider 3DS to be having a significantly positive performance given market is double in Japan
– 3DS has a 57% share of sales in Japan this year
– Only 18% share in Europe
– Only 20% share in the USA
– 3DS XL helped
– 3DS’ seven quarter sales have exceeded the DS
– On Wii U: Nintendo thinks there will be shipment bottleneck to meet demand
– GameStop sold pre-orders in 1.5 days
– 250,000 people are on the retailer’s wait list
– Wii price cut and bundles will drive sales
– Nintendo believes Wii buyer user base is different from Wii U, meaning the two won’t cannibalize each other
– 3DS connection rate increased from 10% to 72% in a year
– Japan and USA exceeded a rate of 80%
– The rate is lower in Europe/Australia, but Nintendo thinks that’s infrastructure-related
– Some retail software in Japan exceeded a rate of 15% from eShop downloads
– New Super Mario Bros. 2 is the highest digital game in the USA with Japan next
– Wii U digital downloads will be available “right after launch” (not clear if it this will literally be at launch)
– 3DS losses improved in the second quarter
– Decided on the Wii U price based on user acceptance of price, not on cogs
– “booked some WiiU costs in 2Q”
– Nintendo considering Nintendo TVii-like service for Japan; a different service is needed in Europe, and Nintendo has plans to announce that in detail in the near future
– “said nintendo’s focus is on game services, synergy with web and increased user satisfaction (rather than other services)”
– Admits smartphones have changed the environment
– Smartphone is “our friend”, not a threat
– Nintendo wants to provide entertainment that exceeds the 85 yen offered in the App Store and do something that can’t be done on smartphones
– Nintendo will collaborate with smartphone companies
– Miiverse fits into these plans with the larger the group of friends the larger the game opportunity
– Anticipating that the mix of third-party games for Wii U will be high initially which contrasts with the Wii
– The Wii saw low third-party support initially, but it gradually improved
– Nintendo has no intention of offering DLC extras for all games since they think it is unhealthy
– Will be done on a game-by-game basis
As far as we know, tomorrow’s North American Nintendo Direct will be focusing on the 3DS. But a presentation has now been confirmed for Japan as well, and it’s promising the latest news on 3DS and Wii U games.
The Japanese broadcast will take place at 4 AM PT / 7 AM ET. Again, three hours later, the North American Nintendo Direct will be shown.
Be sure to check on the site for the latest news from both events.
There’s been a lot of speculation that a Nintendo Direct would soon be announced so that the Big N could share some news about the Wii U. Looks like the rumors were right… sort of.
There is a Nintendo Direct taking place tomorrow – at 7 AM PT/ 10 AM ET – but it appears to be 3DS-focused.
Take a look at the following message just posted on Nintendo’s Facebook page:
“Tune in to Nintendo.com tomorrow at 7AM PT for a new Nintendo Direct! We’ll be taking an in-depth look at several announced Nintendo 3DS games coming this holiday season, and there might even be a sneak peek at a few 2013 titles!”
And so it looks like the wait for Wii U continues!
When you’ve been in the video game business as long as Nintendo, you’re bound move a lot of product. But really, this figure is kind of insane.
In the entire history of the company, Nintendo has sold over four billion games – 4,015,400,000 specifically. That’s the total amount since the release of the Famicom back in 1983.
As far as hardware goes, over 637.75 million systems have been sold since the NES launched. Counting the Virtual Boy brings the total up to 638.5 million.
Heroes of Ruin could be the first and only entry in the series. n-Space studio co-founder Dan O’Leary has expressed disappointment over the game’s sales, noting that it “did not appeal to enough of the installed base.”
As a result, the chances of a sequel aren’t so high. O’Leary also said that he is concerned that “Heroes did not have enough commercial impact to justify a sequel.”
“No, we’re not satisfied with the sales. The 3DS attach rate is… challenging at best and it seems that, for all its promise, Heroes of Ruin did not appeal to enough of the installed base. I am super pleased with what we made and would love to return to the genre one day, but I fear that Heroes did not have enough commercial impact to justify a sequel.”
On its surface, Style Savvy: Trendsetters may not seem like a huge game. But it really is.
If you plan on downloading Trendsetters from the eShop, you’ll need a pretty big SD card. The game takes up 10,500 blocks, which is roughly 1.35GB.
In case you were wondering, those two figures do not take DLC into account.
