Game Over, Mario? Nintendo Profits Crash ‘N Burn
Despite Christmas being a bumper period for gaming, Nintendo has crashed and burned against PlayStation and XBox, both launching new consoles in November, which led to shortages globally.
The Japanese gaming giant has now downgraded its forecast for the full year to March 31, predicting net losses of 25,000m yen, or around A$272m – down from $598m profit forecast.
Nintendo is also predicting an operating loss of A$380 million – a far cry from the $1.08bn predicted less than a year ago.
“We can no longer expect our financial performance to recover in the current fiscal year,” it warned investors this week.
“In the year-end sales season which constitutes the highest proportion of the annual sales volume, software sales with a relatively high margin were significantly lower than our original forecasts mainly due to the fact that hardware sales did not reach their expected level.”
Both Microsoft and Sony have sold several million Xbox One’s and PS4’s, to date, and the high demand will continue for the foreseeable future, say gaming retailers.
By comparison, Nintendo will sell just 2.8 million Nintendo Wii U’s – down from 9 million forecasted – and just 1.3 million Nintendo 3DS’ in the 12 months to March 2014, its forecast indicates.
By default, sales of Nintendo games like Mario Bros, Pokemon are also floundering, as mobile games like Angry Birds and Candy Crush Saga too, are cannibalizing tradition platforms.
Nintendo’s refusal to develop a mobile platform has played a part in its downfall, as PS4 and Xbox One markets themselves as fully fledged entertainment devices, with mobile games, TV, movies and the Internet at gamers’ fingertips.
Nintendo’s share price fell following the gloomy outlook, closing 6% lower.