Nintendo Announces Another Net Loss Due to Poor Wii U Sales

Nintendo

If Bad News Barrett been at Nintendo headquarters last week, he might have banged his gavel before using his trademark catchphrase, “I’m afraid I’ve got some bad news!” Nintendo announced last Friday, May 2 that the company is forecasting a net loss for this year due to the poor sales of the Wii U console. The gaming company announced that they expect a loss of 25 billion yen ($240 million) for the year, through March 2014. This was a reversal of their previous forecast of a 55 billion yen profit forecast, with an expected annual revenue drop of about 36 percent.

The significant downgrade for Nintendo shows a huge contrast to its competitors, Sony and Microsoft, which have had much greater success with the recent launches of their new consoles–the PlayStation 4 from Sony and the Xbox One from Microsoft. Both consoles for Nintendo’s rival companies launched last November. The sector of home game consoles is approximated to have an annual financial worth of $44 billion.

Nintendo also announced that they expect to sell about 2.8 million units for the Wii U worldwide this year. This is a third of their earlier prediction of a sales mark of 9 million consoles. In comparison, Sony’s PlayStation 4 console had already sold more than 4.2 million units by the start of the year, after being launched on Nov. 15, 2013. The Wii U launched in late 2012.

Nintendo President Satoru Iwata said at the press briefing, “During the year-end shopping season, we weren’t able to lift sales momentum for the Wii U.” He continued, “The decrease in-game software sales is having the biggest impact.” In addition, Iwata offered an apology to shareholders, explaining that demand for the Wii U console was weak in the ever-important European and US marketplaces. Iwata went on, “My duty, more than anything else, is to revive our business momentum.”

Nintendo’s stock shares in Tokyo were down 2.75 percent at 14,645 yen as of last Friday. This was the stock price before Nintendo’s announcement was made. In addition, the news comes after Nintendo already had weakened profitability last year. Nintendo’s net losses due to the poor Wii U sales were blamed on the high development and marketing costs for the console. However, sales of the Nintendo 3DS handheld console and its game titles have done better sales-wise.

One of the biggest issues the Nintendo Wii U has faced is a lack of quality and competitive game titles. Analysts also believe Nintendo is facing tough economic issues in the US and Europe due to the rise of cheap and free downloadable game titles for smartphones and tablets. In May 2013, Electronic Arts spokesperson, Jeff Brown, stated that the game publishing giant would not be developing any new games for the Wii U.

With the Electronic Entertainment Expo (E3) right around the corner, the gaming world waits to see what Nintendo’s next move will be. For E3 this year, Nintendo will forgo a traditional live keynote media briefing in favor of a Nintendo Digital Event. With the recent news of the company’s continued struggles and net loss in profits due to the poor Wii U sales, it will be interesting to see what Nintendo has in store for gamers at the conference.

By Jeffrey Harris

Sources:

New Straits Times
Nintendo.com
Kotaku

6 Responses to "Nintendo Announces Another Net Loss Due to Poor Wii U Sales"

  1. Lisa   June 5, 2014 at 4:10 am

    Not surprising. The quality of wii u disks is very poor compared to our experience with xbox and ps3 games. We had been playing the Lego city and super Mario bros games on and off for only 6 weeks when both stopped working due to an unexplained error. It took nintendo a few attempts to recognise that the fault lay with the disks and not the console nor the gamepad. They refused to replace the disks, saying that they have no clarity on when the disks were originally damaged and charged £40 for each replacement.
    Not a fan of wii u. Have advised those considering the wii u to stick with xbox or ps.

    Reply
  2. damanmoney   May 26, 2014 at 8:25 am

    I think this is american media trying to boost ps4 and ex box sales for greater profit margins. Nintendo never offers as high a profit because the offer savings to the consumer more then they earn for the retail outlets and stores. And yes this is old they have pretty consistant sales and have decreased there losses. Silly news trying to wreck a company over higher profit. On sales of ps4 and sex box. Did fox news do this article. Lol. You know how they write and say things about democrats.

    Reply
  3. Mark   May 5, 2014 at 7:17 am

    Ya this is 3 months old. THIS IS NOT NEW NEWS PEOPLE. BE WARNED.

    Reply
  4. ddfgdgd   May 5, 2014 at 7:15 am

    its a broken record and this news is so old already and by the way Wii u sales are over 6.5 million ….the real failure is the xbox one its sales are not even 4 million and stalled talk about them not the Wii u…and when Mario kart 8 comes out and the bundle sales will fly threw the roof.

    Reply
  5. Frolaskel   May 4, 2014 at 10:52 pm

    Thank you for just listing the facts and not hopping on the “gloom and doom” hype train. The relative optimism and curiosity about what Nintendo intends to unveil at E3 is both refreshing and a reasonable notion, in my opinion.

    Though, if there was one comparison I saw neglected here, it’s whether Sony or Microsoft are meeting their sales quotas, and actually profiting on their consoles. Sure Sony has a few million more consoles out, but are they actually turning a profit? (historically they haven’t been terrible successful on their game media front). the question is even more salient when aimed at Microsoft.

    They wouldn’t necessarily have to post sales forecasts to the same degree, seeing as they have many other streams of revenue.

    Reply
  6. Steven   May 4, 2014 at 10:34 pm

    This is old news. The New Straits Times posts this same exact thing since February.

    Reply

Leave a Reply

Your email address will not be published.