When Nintendo announced it had lost ¥25.5 billion ($336 million) in July, it slashed its own profit forecasts for the rest of the year by over 80 percent. Today the Mario factory announced that its performance in the most recent fiscal quarter is failing to even hit those adjusted targets, with net losses amounting to ¥44.7 billion ($589 million) for the quarter, taking net losses for the first half of the firm's financial year to ¥70.2 billion ($926 million).
Yesterday, a report out of Japanese financial daily Nikkei indicated Nintendo would post an ordinary loss of ¥100 billion ($1.3 billion), compared to the firm's forecast of ¥55 billion ($720 million) for the first half of the year. In actuality, the firm reported an ordinary loss of ¥107 billion ($1.41 billion). These losses were blamed on a multitude of factors, including unfavourable exchange rate changes, declines in hardware and software sales, and decreasing margins thanks to price cuts and inventory markdown.
For the April-September reporting period, Nintendo said net revenue came in at ¥215.7 billion ($2.84 billion), down 40.6 percent year-over-year. That steep decline is compounded by the fact that Nintendo's 2010 first-half figures were down 33.7 percent from the same period in 2009.
Nintendo did state that the 3DS price cut sales "have been improving" but that progress had been hampered by a lack of hit titles, with the exception of The Legend of Zelda: Ocarina of Time 3D. During the six months to the end of September, 3.07 million 3DS handhelds were sold along with 8.13 million 3DS games. This compared to hardware and software sales for the DS range, which were 2.58 million and 29 million, respectively.
Wii console sales for the six-month period came in at 3.35 million units, compared to nearly 5 million units from the year-ago period. Some 36.5 million Wii games were sold worldwide between April-September.
As a result, Nintendo has again revised its full-year estimates. It is expecting full-year net sales to be ¥790 billion ($10.4 billion), which is 12 percent lower than its July estimate of ¥900 billion ($11.9 billion). Sales for the previous year were in excess of ¥1 trillion ($13 billion). The firm has also wiped out its prediction of a full-year profit: it now expects to post a net loss of ¥20 billion ($260 million), compared to its previous forecast of a ¥20 billion ($260 million) net profit. Bloomberg notes that this forecast is the first of its kind in 30 years from Nintendo.
UPDATE: This story initially stated two currency conversions incorrectly. ¥25.5 billion is $336 million, not $336 billion, and ¥44.7 billion is $589 million, not $589 billion. We regret the errors.