Consumers Turn Off Wii Nintendo Profits Crash

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Japanese gaming giant Nintendo has seen a massive 66.1% drop in profits as consumer stop buying the Wii gaming consoles and their new DSi handheld. Also hurting the Company was a shortage of games for the platform.

Nintendo’s net sales for the period dropped by 40.1% to 253.50 billion yen compared with 423.38 billion yen in the previous year.  As a result operating income for the period plunged to 40.40 billion yen, representing a 66.1% decrease on 119.19 billion yen for the same period in the prior year.  Net income for the period dropped by 60.6% to 42.32 billion yen compared with 107.27 billion yen in the previous year.


Sales dropped by 21% in Japan, 38% in the Americas, and by 50% in Europe compared to last year.  Operating income declined by 39% in Japan, plummeted by 95% in the Americas and saw a 106% drop to an operating loss of 500 million yen in Europe.

It is not known whether sales of Nintendo products in Australia felll.

The dramatic turnaround from Nintendo’s recent success highlights the sudden drop-off in Wii sales.  Only 2.23 million units were sold during the period compared with 5.17 million in the same period in the previous year.  The decline appears to be across the board, with Japan witnessing a 60% drop in like-for-like sales, a 64.8% decrease in Wii sales across the American regions and a 47% decline in Wii sales in all other areas.  As a result, lifetime worldwide sales for the Wii currently stand at 52.62 million units.

 

Due to a lack of new high profile Wii releases, software sales dropped to 31.07 million units compared with 40.41 million units in the same period for the prior year.  Nintendo attributes this to the fact that Mario Kart Wii and Wii Fit were released in the Q1 period last year.

 

Despite the launch of the Nintendo DSi, sales of the handheld dropped to 5.97 million units compared with 6.94 million for the same period in the previous year, representing a 14% decrease.  Sales of the Nintendo DS managed to increase by 4.9% in Japan, but dropped by 7.4% and 21.9% in the Americas and other territories respectively.  Lifetime sales of the Nintendo DS stand at 107.75 million units.

Again due to a lack of new titles, sales of Nintendo DS software dropped by 20.5% to 29.09 million units, compared with 36.59 million units for the same period in the prior year.

Nintendo appears to have previously forecast such a dramatic drop and has stuck to its previous forecasts, which remain at net sales of 700 billion yen, an operating income of 165 billion yen and net income of 100 billion yen for the six months ended September 30th 2009.  Expectations for the full fiscal year ending March 31st 2010 remain at net sales of 1.8 trillion yen, an operating income of 490 billion yen and a net income of 300 billion yen.

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