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Nintendo Hit With Dramatic Decline in Sales

By - Source: Bloomberg | B 36 comments

Nintendo is finding itself in financial trouble as the company has not an effective tool to halt the decline of its console shipment numbers.

The company sold only 3.35 million Wiis between April and September, down from 4.97 million in the same time frame of 2010. Game shipments dropped dramatically from 65.2 million last year to 36.5 million units.

The 3DS is not as strong as Nintendo hoped for and sold just 3.07 million units (8.13 million games). The forecast for game sales for the fiscal year was reduced from 70 million to about 50 million. The regularDS console dropped from shipments of 6.69 million to 2.58 million devices. Nintendo said about 29 million DS game units shipped during the quarter, down from 54.8 million in 2010.

"Nintendo faces a very harsh time now" said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments, Bloomberg. "Competition in the video-game industry is getting severe, and Nintendo must fight for customers who are using smartphones and tablets."

Nintendo's quarterly revenue declined by 41 percent to about $2.8 billion; the net loss was about $26 million. The company told analysts that that it may be reporting its first annual loss in 30 years. President Satoru Iwata stressed that the upcoming Wii U will be introduced in June 2012, and there is no doubt that Nintendo will rely on the success of the console to recover from its current struggles.

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Top Comments
  • 20 Hide
    jdwii , October 28, 2011 3:08 AM
    Nintendo is the only console maker i like as i can play most other games such as COD and BF3 on the PC. I still love Mario games.
  • 16 Hide
    BigOlSillyGoose , October 28, 2011 3:30 AM
    Honestly, I'm not sad to hear this. I think nintendo has misplaced their resources and relied too heavily on turning out new gimmicky hardware. They need to spend more time developing new and interesting IP's.
  • 11 Hide
    lpedraja2002 , October 28, 2011 3:45 AM
    Guys this doesn't mean that Nintendo will cease to exist, but they certainly need to step it up with their games. Relying on old Nintendo Classics won't do much to save their console if the other titles are crap, which was the Wii's case. Nintendo have on their side the most recognizable games in history but they made the mistake of going cheap on their hardware and that made it difficult for developers to make appealing games for the Wii. They should step it up with the Wii U and instead of relying on that damn controller they should beef up their GPU to not just a "little more powerful than current consoles" but to a level which makes the current consoles look like crap. Then developers will have all the extrapower to make a good looking innovative game.
Other Comments
    Display all 36 comments.
  • 20 Hide
    jdwii , October 28, 2011 3:08 AM
    Nintendo is the only console maker i like as i can play most other games such as COD and BF3 on the PC. I still love Mario games.
  • 3 Hide
    drapacioli , October 28, 2011 3:22 AM
    If they do go down I hope they don't take their great franchises like Mario and Pokemon with them, those are too good to die.
  • 16 Hide
    BigOlSillyGoose , October 28, 2011 3:30 AM
    Honestly, I'm not sad to hear this. I think nintendo has misplaced their resources and relied too heavily on turning out new gimmicky hardware. They need to spend more time developing new and interesting IP's.
  • 11 Hide
    AbdullahG , October 28, 2011 3:35 AM
    Of all the console developers, Nintendo is the only one I support. I've been playing Mario, Sonic, etc. games all my life. Heck, I still have my N64, Gameboy Color, Gameboy Advance, DS, DS Lite, Gamecube, and Wii lying around, and I play on them occasionally. I'd hate to see them fall.
  • 11 Hide
    Azisien , October 28, 2011 3:40 AM
    Honestly I see no reason why their sales should have gone anywhere but down over the past year. Sit there and think about the hard hitting titles that have come out for the Wii in 2011.

    ....

    Got anything? Yeah, me neither. Instead of supporting their console that dominated the market for several years with more first-party titles, they pushed (rushed?) out a new half-upgrade for the Nintendo DS with gimmicky 3D as its "best" feature. The two flagship games for the 3DS were 15 years old and on the Nintendo 64, AND neither of them were out at launch.

    Meanwhile, phones, tablets, Xbox 360, PS3, and hell even PC see continued support all the time. There may be turn around with some AAA titles like Skyward Sword, Mario Land 3D, and Mario Kart 3D on the horizon, but the lost ground will not return quite as easily anymore.
  • 11 Hide
    lpedraja2002 , October 28, 2011 3:45 AM
    Guys this doesn't mean that Nintendo will cease to exist, but they certainly need to step it up with their games. Relying on old Nintendo Classics won't do much to save their console if the other titles are crap, which was the Wii's case. Nintendo have on their side the most recognizable games in history but they made the mistake of going cheap on their hardware and that made it difficult for developers to make appealing games for the Wii. They should step it up with the Wii U and instead of relying on that damn controller they should beef up their GPU to not just a "little more powerful than current consoles" but to a level which makes the current consoles look like crap. Then developers will have all the extrapower to make a good looking innovative game.
  • -2 Hide
    tomfreak , October 28, 2011 4:00 AM
    if u aint smartphones/tablet, u have to stay ahead of technology like graphics and good exclusively game, Give something that the smartphone use cant have.
  • 4 Hide
    jonyb222 , October 28, 2011 4:02 AM
    I think Nintendo will be "Fine" they might go through a tough patch but they're not dying anytime soon.

    As for why they're having a tough time, well I (as well as good portion of people here) am no expert so all I can say would be that it's most likely a mix of things:

    1) The 3DS doesn't differentiate itself enough from the other DSes, this is just an idea of course. The Wii U might have the same problem, kid wants a Wii U, parent tell them they already have a Wii.
    2) As some people said there wasn't that many launch titles, I'd argue that while that is a valid point I don't think it's as important, in fact people might be getting a bit tired of the same old IPs, though that's up to opinion.
    3) Recession, people just don't want to spend, half of Europe is in a debt crisis after all
    4) Looking at wikipedia it says they've sold 90 million Wiis and 150 DSes... let's be honest, that had to slow down at some point and I don't know about other people but I've NEVER had a Nintendo console break on me, which means I never went out and bought a replacement one... ok a bit of a weak argument, I really wanted 4 points, there are probably many more possible reasons for sales slowing down

    From what I've seen of it I think the Wii U has a lot of potential and I look forward to seeing how it pans out.
  • 1 Hide
    SteelCity1981 , October 28, 2011 4:10 AM
    The Portable gaming days are numbered. With cell phones now that are able to play games around the same level as a portable gaming system and can do much more, it was just a matter of time before Nintendo's portable gaming reign would start to come to an end. If Nintendo was smart they would create an hybrid portable gaming system that allows you to call text and download apps with a Nintendo based phone service network and heavily compete against cell phone companies on a global scale that you pay a monthly pay as you go fee each month.
  • 3 Hide
    thomaseron , October 28, 2011 4:42 AM
    Some of the decline is probably because of the U coming... :) 
  • 4 Hide
    aftcomet , October 28, 2011 4:53 AM
    Not really a surprise. Whoever wanted a Wii has one.
  • 1 Hide
    alidan , October 28, 2011 5:05 AM
    the 3ds has no games, the ds has sold over 140 million units, everyone who wants one has one, and the wii... never supported by hard core because... well they care about graphics, dont want to use a wii mote, and correct me if im wrong but have game cube controllers been discontinued?

    the 3ds, if it had more than 3 good games, but 1 genre defineing game from each segment, (sports, puzzle, action, rpg, fps... ect) would be a great system, but all it has is starfox zelda and street fighter 4. people who got street fighter got it on the console or pc, and starfox and zelda are games from over ten years ago, not bad games, some of the best ever made, but old games non the less. if they postponed launch of the 3ds to coincide with the release of zelda, i would have picked on up day 1, but the fact that in the 3-5 months after its launch, and before zelda, there were no other games of merit... left me not wanting to get one till they stepped up games, and with a definite system seller, at least to me, mega man legends 3, canceled... im not sure they will get my money till the system is dead/dieing and i can get everything for rock botom prices.
  • 1 Hide
    dalauder , October 28, 2011 5:25 AM
    I don't understand how Nintendo expected to churn a profit. Their projections were unrealistic. There were a few naive/foolish people who bought Wii's in the last year. There aren't anymore left. The Kinect is too much cooler of a gimmick and all the systems are VERY long in tooth.

    Sony doesn't make the PS3 money through its console (maybe they do today, but not for the first 3 years)--it's through the games. And until Nintendo offers developers a console they'd actually want to program for, Nintendo's revenues will continue to decline.

    Nintendo missed a huge opportunity when they launched their newest portable system (3DS). They should've started with the original iPhone lauch--something amazingly successful and the future of portable gaming (smarphones, not necessarily the iPhone)--not the Nintendo DS. Launch something that people believe they need.

    Why couldn't the 3DS have been everything you need for portable and home entertainment? It's like they got a fun idea and just ran with it. They should've done surveying of populations to find out what people actually want.
  • 1 Hide
    julianbautista87 , October 28, 2011 5:31 AM
    Nintendo.. it brings me so many good memories. The first analog command, the first wireless controller... I bought a wii just for the galaxy, the galaxy 2 and the DKC returns... those were amazing games! It's a shame that for now PC is the only thing I need for gaming.
  • 1 Hide
    kinggraves , October 28, 2011 5:41 AM
    Nintendo's problem is that they were way too successful with Wii and now the sharks are paying attention to them. Anything that isn't a massive success like Wii is a "failure". That being said though, since Iwata took over Nintendo from the long standing original owners, the company hasn't seemed to have it's former magic. They expected too much to happen with 3DS when 3D was not well adopted and also executed a poor launch strategy. The Wii U seems to be going in a strange direction as well. Nintendo systems have always been living room party friendly with devices like the WiiMote and games like Mario Party/Kart and Goldeneye/Perfect Dark. The Wii U seems to be trying it's best to NOT be party friendly. Even the name itself is "U", not "WII", and the special control device can only be used by one person, eliminating chances of it being used in party games. I really want to have faith that they still know what they're doing, but I don't know if things will ever be the same as they used to be.

    Still, they aren't going anywhere. They still have a lot of money to spend from Wii. Don't worry about what penny pinching analysts think, Nintendo's not going to belly up anytime soon,
  • 1 Hide
    gio2vanni86 , October 28, 2011 6:00 AM
    I never liked Nintendo, after the Wii launched i just saw them back peddling in my mind. But thats just my opinion, i would take sega back over nintendo any day. If there Wii U doesn't sell like crazy i for see them failing. Not interested in old hardware but the Wii U just seems like a Wii with what Xbox 360 had with maybe a bit more power but beyond me, i will stick to my PC and just wait for the new Xbox/Sony console. Good luck to nintendo.
  • 0 Hide
    frost_fenix , October 28, 2011 6:13 AM
    Nintendo did well to realize a there was a big and relatively untouched market of "casual gamers" when they released the wii. The problem is their console was underpowered from the start. They didnt try to compete with sony and microsoft for the real gamer market. Now that smartphones have games with better graphics than the wii and more releases people are not bothering to buy anything wii related. I never liked the wii, I realized from the start it was a gimmick people would get tired of and I wont be missing it.
  • 0 Hide
    Parsian , October 28, 2011 6:18 AM
    Duh, there is only so many people that want Wii. All those people have already own one.

    Beside, smart phone/tablet gaming is growing exponentially where as hand held gaming usage at best grows linearly. At one point, the former will take over the latter's customers simply because its an all in one device and take least amount of space.

    So Nintendo, you are screwed if you do not expand and innovate
  • 2 Hide
    teknomedic , October 28, 2011 6:48 AM
    First, Nintendo can survive on their 1st party games alone... they've done it before. 2nd, we're talking declines from massive, massive sales over the years so this is more like a return to normal, but of course it looks sickening due to how large the decline is.
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