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Nintendo Sales and Earnings Down Sharply From Last Year

Exchange losses and DS price reduction contribute to lowered earnings.

Nintendo mentioned Donkey Kong Country Returns as one of its big successes. Although developed outside of Japan, the game pulled big numbers domestically.

Nintendo saw major drops in sales and earnings for the fiscal year ending March 31, 2011. The company shared its earnings today just as it formally announced the successor to the Wii.

Sales were down 29.3% from the year prior, dropping from 1,434,365 million yen to 1,014,345 million yen. Operating income was down 52.0% from last year's 356,567 million yen to to 171,076 million. Net income dropped 66.1% from last year's 228,635 million yen to 77,621 million yen.

For fiscal 2010, the company highlighted its efforts regarding Mario's 25th anniversary, saying that promotions such as the special red versions of the DSi LL (XL) and Wii and the release of a Wii version of Super Mario All-Stars contributed to strong sales. Strong software performers for the year were Pokemon Black & White, Super Mario Galaxy 2, Wii Party, and Donkey Kong Country Returns.

Sales were down worldwide, however. This includes all territories, including Japan and Europe, but Nintendo made particular mention of falling hardware and software sales in the United States, which Nintendo referred to as its largest market. The drops come following a December 2009 where the company saw record sales in the territory.

Nintendo also blamed the drops on the price reduction of the DS and the appreciating yen. The rising yen contributed an exchange loss of 49.4 billion yen due to the reevaluation of assets in foreign currencies. Foreign exchange losses are reflected in the company's net earnings (the 77,621 million yen figure).

Split between platforms, Nintendo sold 17.52 million DS systems, 3.61 million 3DS systems, and 15.08 million Wii systems. The systems' life to date sales are, respectively 146.42 million, 3.61 million, and 86.01 million units. Total worldwide software sales were 120.98 million DS titles, 9.43 million 3DS titles and 171.26 million Wii titles.

Nintendo also highlighted million sellers for itself and third parties. DS million sellers increased from 114 to 139. Wii increased from 79 to 103. Even the 3DS had two million sellers for the fiscal year.

Looking forward to the current fiscal year, ending March 31, 2012, Nintendo said that it will work to spread the Nintendo 3DS "vigorously." It also mentioned the upcoming "Nintendo e-Shop," the software download service for the 3DS, but did not give specifics. For DS and Wii, the company said that it plans on continuing to push the systems with new games like The Legend of Zelda Skyward Sword.

Regarding the March 11 Great East Japan Earthquake, Nintendo said that it did not suffer direct damage that will significantly affect production. However, it did say, "it can be predicted that there will be an indirect impact from individual consumption patterns or economic conditions in the future."

Nintendo expects sales this year of 1,100 billion yen, operating income of 175 billion yen and net income o 110 billion yen. These use an exchange forecast of 83 yen to the dollar.

The company expects to sell 11 million DS systems, 16 million 3DS systems and 13 million Wii systems over the fiscal year. It expects 67 million pieces of DS software, 62 million pieces of 3DS software, and 120 million pieces of Wii software. These forecasts do not include Wii's successor.

You can see Nintendo's earnings report for yourself at Nintendo's investor relations page.

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