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3DS price cut leads to first annual losses for Nintendo in over 30 years
3DS price cut leads to first annual losses for Nintendo in over 30 years
April 26, 2012 | By Mike Rose

April 26, 2012 | By Mike Rose
More: Console/PC, Business/Marketing

Nintendo today posted its financial results for the last fiscal year, missing sales forecasts and noting its first annual losses in over 30 years.

The company put this down to the Nintendo 3DS price cut, which it said was necessary to get sales of the handheld back on track with its predecessor, the Nintendo DS. Due to the price cut, the handheld is now being sold below cost, a statement from the company explained.

However, Nintendo said that it still plans to pursue its "Gaming Population Expansion" goal despite these losses, by aiming its games at all possible consumers, regardless of age, gender or gaming experience.

Turning to the overall shift to digital distribution that is currently being seen in the video games industry, Nintendo said that is it looking to adapt to these changes, and is "envisioning the digital distribution of packaged software and is aiming at expanding the digital business."

Part of this added focus on digital is the company's "Nintendo Network", which it is looking to push more heavily as an online network service for both the Nintendo 3DS and the Nintendo Wii U.

Over the course of the fiscal year ended March 31, 2012, the Nintendo 3DS saw hardware sales of 13.53 million, said the company. Japan accounted for 4.8 million of this total, while the Americas saw 4.7 million sold.

Worldwide software sales for the Nintendo 3DS came to just over 36 million units for the full fiscal year. In comparison, the Nintendo DS saw hardware sales of 5.1 million, and software sales of 60.82 million.

The company's Nintendo Wii console sold 9.84 million hardware units during the fiscal year, and 102.37 million software sales.

For the fiscal year, Nintendo posted revenue of 647.7 billion yen ($8.0 billion), down 36.2 percent compared to 1 trillion yen ($12.3 billion) year-over-year, and missing its forecast of 660 billion yen ($8.2 billion). Losses were 43.2 billion yen ($532.2 million), compared to last year's profits of 77.6 billion yen ($956.0 million).

Looking to the next fiscal year, Nintendo expects that it will no longer be selling the 3DS below cost by the middle of the year. The company also plans to launch a number of high-profile titles, including New Super Mario Bros. 2, Animal Crossing and Brain Age during the year.

The company's next home console, the Wii U, is also due to launch "at the end of this calendar year," with the aim to swing the company's finances back to profits. Nintendo expects to see revenues of 820 billion ($10.1 billion) and profits of 20 billion yen ($246.4 million) for the current fiscal year ending March 31, 2013.

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Daniel Soltyka
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In Nintendo's defense, the DS is awesome, and the 3DS is *really* awesome. It's possible the price point was just too high, or that the general public simply wasn't interested, but really the 3DS doesn't compare to the Virtualboy.

But man, every game I've played on the 3DS has actually been made better by the 3D, it doesn't feel gimmicky or shoehorned. Unlike the Virtualboy which was....well....yeah.

Bob Johnson
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Yeah the 3d adds. Unfortunately glasses-free 3d isn't seamless. Viewing angle is a problem. It makes me wish you could use 3d glasses with the 3ds.

We already knew Nintendo wasn't making a profit this year. They said so last quarter.

From the sound of it the redesign is coming later this fiscal year as I bet it coincides with Nintendo's expectation for a profitable 3ds later this year.

Nintendo needs to go all digital or at least give the option to store your cart digitally on your handheld. The cart thing seems passé in these times when my kids can just pick up the iPad or Touch and play whatever game. With the 3ds we have to track down the carts and cases.

And Nintendo is still the king of the button press to get through an interface unfortunately. Now their interfaces are generally designed nicely outside of this one problem area.

I did watch some kool videos on our 3ds. Nothing even game related. The problem is ....I don't pick up the family 3ds daily to get news or to browse. I pick it up once in awhile to play a game. So I miss a lot of this stuff which is unfortunate since there is stuff on there interesting to an adult. The small amount of content just isn't enough to get me pick up my 3ds for anything else other than the occasional game. NOt when I have an iPad and a laptop.

Doesn't really fit in with the way folks get that type of content either. They tend to hear about it through friends who come across it on YouTube, Facebook, etc. But I do like that the video content is "curated." And it isn't just dumb videos of cats and kids hallucinating under laughing gas. I don't have times to wade through that stuff which makes for a weird paradox. Kids have the time and might not think that the curated stuff on the 3ds is enough. Adults probably aren't getting a 3ds for themselves yet the curated content might appeal more to them.

NIntendo should make an iPad app with that content in it. And with news of their upcoming NIntendo products and interesting gameplay footage of their current games as well. Think of it as advertising.

Wii U ...they need to keep it down at $250 or less. I didn't like what they showed last year except for the HD graphics and potential of the controller. I think Mario HD will even get the jaded core gamers to check it out. The tablet controller has potential. But seems to me like much of that potential is stored in using multiple tablet controllers not just the rumored 1 controller per console. So I am mixed. What they showed last year is good for Mario Party-type games.

No one is going to buy ports of 360/PS3 games on it. No 3rd party is going to make Wii U-only games of any note either. So I don't think there is any chance the Wii U is more than a 1st party machine.

Some of this makes me think Nintendo should drop the faux-multimedia effort and go back to making their console and handheld purely games machines. It isn't that some of their extra stuff isn't nice, but it is that Nintendo is unwilling to go headfirst into becoming more than a games machine so they end up in this weird middle ground. They end up as con men in some sense because they do enough to tease the potential of their machines outside of games, but then that is where it ends. The News program on the Wii? Actually pretty sweet. But was limited to one source of information - AP reports. Their photo program had some potential but never was expanded or improved. Hell they could sold software to expand it online but never did. Same with the weather stuff. light of these kinds of things....well might not just go back to the days when all you did was put in a cart and turn on the device? That is it. There is something to be said for this simplicity.

Joe Zachery
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Some of this makes me think Nintendo should drop the faux-multimedia effort and go back to making their console and handheld purely games machines.
That was what the Wii, and Ds were a gaming machine with extra things. I believe the WiiU will be the same thing just this time the extra will be expanded on.

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The Virtual Boy was a failure because, well, did you play it? You had to find the perfect balance of holding your controller in a way that wouldn't bump the table and scoot up to the table so you could hunch over and place your face in the periscope-like viewport. Not to mention, when you were done playing how hard it was to just store the thing: power cords, controller, tripod, and your vast library of games. In fact, I think if they bundled it with a hard plastic storage box, it would have been played more.

Meanwhile, the 3DS can play all your old DS games, fits in your pocket, and takes 10 seconds to set up: open, power, play.

Michael Wenk
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The 3DS gives me a headache, quite a bad one that lasts for days. If you haven't had it, then you don't understand what that will do to the desire to buy anything 3DS related.

I wonder if Nintendo will learn from this and be very careful in how they price the Wii U. If they pull a Sony and price it at over 300$, then I see many more losses in Nintendo's future.

Kevin Fisk
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Why don't you just turn the 3D off then? The games are just as good regardless and the console is now priced fairly even if you never use 3D.

Patrick Davis
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This is no different from people who have issues watching 3D movies. You can't please everyone. At least with the 3DS, you can just turn the 3D off.

Russell Carroll
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I actually got headaches playing the 3DS at first whenever I had 3D on for more than 5-10 minutes. I wished it weren't the case b/c I thought it looked sweet in Zelda, but it did me in after a few minutes every time.

I got new glasses in November and ever since I haven't had a problem. I definitely feel for those who aren't able to see the 3D, b/c having been able to play in 3D after initially not being able to, I think the 3D is often fantastic, and I'm really glad to be able to see it.

The games are fine without it, pretty much a PSP (but with Nintendo content), which isn't bad by any means, but even having owned the system for a year I'm often wow-ed when I flip on the system and see a game in 3D.

fred tam
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Just turn it off doesn't work, then you are just left with poor resolution display, and that is hardly a consolation.

Geoff Yates
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Just goes to show how slim margins are on new hardware. Also there wasn't much software to entice people to buy a 3DS either. They fixed two things at once.

Competitive pressures from iOS and Android devices hit the them where it hurts in the casual market segment. Something neither Sony nor Nintendo had experienced to a great degree before.

If they do bring a dual analogue 3DS to market I must say I'll be super wary in the future of buying a new Nintendo handheld (say inside 1 to 2 years).

I'm still not convinced the Wii U tablet is going to be that great (Wii U sucks as a name too). Since it appears only one gamer can use it at anytime how do you have fun when other people come over. The big appeal of the Wii was group gaming.

Andrew Chen
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That's a great point. The expanded audience Nintendo courted with DS and Wii were drawn to certain user experiences. One was the non-game (but "gamified") utility type like the training games that have likely been lost to mobile and social platforms. Even if Nintendo created interesting new experiences in this genre it could be quickly copied and rapidly iterated on until it is superior to the original offering.
But the experience that really sold the Wii was the group gaming aspect with a novel easy-to-understand Interface. The insurgent mobile platforms are not really built to challenge this type of centralized "live" social experience I think, which leaves a clear value proposition for Nintendo to pursue with the Wii U.

Christopher Engler
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Nintendo needs to do something to earn back the younger gamers. The older ones are moving into hardcore gaming devices like the 360 because of the adult content and hardware performance while the younger kids seem happier with dad's old iPhone. My nephews don't have a clue who Mario or Zelda is, but they love the heck out of Angry Birds, Star Wars, and all of the Lego titles. Your move, Nintendo.

Andrew Chen
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I would imagine this developing reality keeps their mgmt up at night...and makes me wonder indeed why they don't invest in brand building and develop a mobile strategy to capture those hearts and minds.
Just spitballin, but Nintendo has some great IP for bridge-building (such as Pokemon or Kirby) leading young consumers up from a simplified or even educational experience to eventually playing the core game offerings.
I bet Gamefreaks would certainly be up for it, unless they hate huge revenue opportunities...