Nintendo's First Quarter Shows Rising Profits

| 31 Jul 2013 10:27

Image Source: Nintendo

Wii U sales may start to pick up as well, as Nintendo forecasts 900 million unit sales for the year.

It's an odd financial quarter where you make fewer sales this year than you did last year, but still post a healthier profit; yet that's what Nintendo has managed to do. Net sales in April-June 2013 were ¥81, 548 million, ($829.684 million) a decrease of a little under ¥4,000 million on the same period last year. However because cost of sales went down, that means gross profits are up, and net income rose to ¥8,624 million ($87.742 million) overall. Nintendo acknowledges that its next generation Wii U console hasn't enjoyed good sales, but hopes that a flood of new first and third party titles will revive interest in it.

That's why Nintendo's forecasting 900 million Wii U units sold by March 2014. Currently it's managed to move about 3.61 million units world wide, which means Nintendo believes it can move twice as many units as it has so far, in the next year. Given the Wii U's sluggish sales to date, particularly in North America, this may prove too bold a forecast, but something needs to happen to improve the Wii U's fortunes, and an increase in available games might just be it. That said, while there are quite a few new titles on the way, Nintendo's financials show a worrying number of them due Spring 2014, or just sometime in 2014, or TBD. One's just listed as "a brand new title from Monolith Software."

There may be another way forward. "We also strive to improve hardware profitability by reducing [Wii U] costs," says Nintendo, but whether or not this suggests a price cut on the horizon is debatable. It's more likely that the console will hold its price at the current level for now, while striving to make as much as it can out of those margins. Later, perhaps, a reduction in costs will be passed on to the consumer, but for right now Nintendo needs all the Wii U help it can get.

Source: Nintendo

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