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Nintendo Announces Second Quarter Earnings

Company posts 70 billion yen loss due to strong yen and hardware price cuts.

While Zelda sold a million units, Nintendo noted that 3DS does not yet have many hit titles.

Nintendo has released its earnings statement for the first six months of the fiscal year. The statement confirms the losses Nikkei reported on yesterday.

For the six months spanning April 1 through September 30, Nintendo saw sales of 215,738 million yen, with an operating loss of 57,346 million yen and a net loss of 70,273 million yen.

The net loss was double the 35,000 million yen Nintendo had forecast back in July. Additionally, net sales were down from the original forecast of 240,000 million.

For the full year, Nintendo now expects net sales of 790,000 million yen, down from the 900,000 million forecast, operating income of 1,000 million yen, down from the 35,000 million yen forecast, and a net loss of 20,000 million yen, down from the forecast net gain of 20,000 million yen.

Nintendo cited the stronger-than-expected yen appreciation as reason for the performance. The re-evaluation of assets held in foreign currencies resulted in a 52.4 billion yen loss. Of the 215.7 billion yen in sales, 79.2% came overseas.

In addition to the currency issue, Nintendo blamed hardware price drops for cutting into profits. However, it also noted that since the 3DS price drop, hardware sales have been improving.

In hardware and software sales, Nintendo sold 2.58 million DS systems, 28.99 million DS games, 3.07 million 3DS systems, 8.13 million DS games, 3.35 million Wii systems and 36.45 million Wii games. Total hardware sales now stand at 149 million DS systems, 6.68 million 3DS systems and 89.36 million Wii systems.

3DS and Wii hardware sales targets for the current fiscal remain unchanged, at 16 million for 3DS and 12 million for Wii. However, Nintendo lowered its DS expectations from 9 million to 6 million.

You can see Nintendo's full earnings report here (PDF).

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