Nintendo Financial Results – Nine Months Ended December 2016 (April – December)

Today, the Nintendo financials results for the Nine Months Ended December 2016 were revealed, and unfortunately, they’re not as good as one would expect. While the company is still technically in the black (due to the sale of the Seattle Mariners, earlier this year), sales are down Year on Year.

Nintendo Financial Results – Raw Data

Let’s start with some raw data:

• Net Sales: 311 121 million Yen (2.541 billion € / 2 719 billion $ / 2.168 billion £), a drop of 26.9% over the same period last year (425 664 million Yen);
• Operating income: 26 315 million Yen (215 million € / 230 million $ / 183 million £), a drop of 38.1% over the same period last year (42 485 million Yen);
• Ordinary income: 49 110 million Yen (401 million € / 429 million $ / 342 million £), a drop of 11.2% over the same period last year (55 295 million Yen);
• Profit attributable to owners of parent: 102 969 million Yen (841 million € / 900 million $ / 717 million £), an increase of 153.9% over the same period last year (40 558 million Yen)
• Digital sales: 23.1 billion Yen (as opposed to 30.5 billion Yen during the same period last year).

These graphs show the proportion of Software / Hardware / Other (accesories, amiibo) in sales, but also the geographical breakdown of sales. While sales are down pretty much everywhere, it’s only in North America than the component ratio dropped: 39% of total sales for the Nine Months Ended December 2016 (it was 43.7% last year). In other words: sales in North America were hit harder than in other regions.

As seen below, sales outside Japan amount to 221.3 billion yen or 71.2% of the total sales.

Nintendo Financial Results – Hardware / Software Sales

• Nintendo 3DS: 6.45 million units for April – December 2016 / 65.30 million units since launch;
• Nintendo 3DS (Software): 46.78 million units forApril – December 2016 /320.96 million units since launch
• Wii U: 560 000 units for H1 2016-17 / 13.36 million units since launch
• Wii U (Software): 8.3 million units / 92.35 million units since launch

 Here’s some details about Nintendo 3DS sales (data in parenthesis is for April – December):

• Nintendo 3DS XL – 19 964 000 (+3 000 units) [NB: this model seems to have been discontinued in Japan and North America]
• New Nintendo 3DS XL – 9 820 000 (+3.53 million units)
• Nintendo 2DS – 7 100 000 (+1 320 000 units)
• New Nintendo 3DS – 2,490,000 units (+38 000 units)

Nintendo Financial Results – Nintendo comments

 For the Nine Months Ended December 2016, Nintendo mentions the strong sales of Pokémon Sun and Moon, which have sold a combined 14.69 million units since launch (that means it’s already outsold Pokémon Omega Ruby / Alpha Sapphire, and should easily outsell Pokémon X and Y in the upcoming months).

As for Super Mario Maker for Nintendo 3DS, Nintendo doesn’t give an exact number in that document, but they do say it’s sold at least 1 million units worldwide.

Naturally, they didn’t forget about the release of Pokémon GO, that led to a significant increase in sales for Pokémon games and Nintendo 3DS Hardware (though most of that increase comes from Europe and North America, not Japan). As a result, the Nintendo 3DS ended up selling 6.45 million units (+10% over the same period, last year), with 46.78 million units for Software (+20%).

Wii U, on the other hand, didn’t really do all that great, but it was all within expectations. Nintendo had planned to ship 800 000 units worldwide for the current Fiscal Year, and for the Nintendo Months Ended December 2016, sales topped 760 000 units (-75% Year on Year. In other words, there’s only 40 000 units left for Q1 2017. Software-wise, 12.48 million units were sold -45%).

Super Mario Run is mentioned, but Nintendo doesn’t give any new numbers. Same for the Nintendo Classic Mini: Nintendo Entertainment System, which enjoyed “widespread popularity”. As for amiibo, we have:

• 6.5 million units for figures
• 6.6 million units for cards

It looks like the release of new games compatible with amiibo helped sales, but the impact was rather limited in the end. And naturally, without a strong offering of downloadable content (as opposed to last year, which had Super Smash Bros. for Wii U and Nintendo 3DS DLC), digital sales are down Year on Year.

Some quick notes about the Nintendo Financial Results:

• ” We have also included 16.7 billion yen of share of profit of entities accounted for using the equity method related to The Pokémon Company and other investments, resulting in an ordinary income of 49.1 billion yen.”
• “Due to the sale of part of our equity in the company that manages the Seattle Mariners Major League Baseball team, we recorded gain on sales of investment securities totaling 63.5 billion yen as extraordinary income, meaning that profit attributable to owners of parent was 102.9 billion yen.”

Nintendo Financial Results – Forecast

For the January – March period, Nintendo mentions the release of the Nintendo Switch on March 3rd (worldwide), and key titles such as The Legend of Zelda: Breath of the Wild (also releasing on Wii U), 1-2-Switch, and “strong third-party titles”.

For the Nintendo 3DS, Nintendo is counting on Pokémon Sun and Moon, Super Mario Maker for Nintendo 3DS, but also Mario Sports Superstars.

As for smart devices, we have:

• Fire Emblem Heroes on February 2nd (Android and iOS)
• Super Mario Run in March (Android)
• Animal Crossing delayed to next Fiscal Year (April 1st onwards)

Finally, Nintendo decide to revise its financial forecast one more time (see below for more details).

Nintendo Financial Results – Revised Forecast

Here’s the revised forecast for FY 2016-17:

• Net sales: 470 billion Yen > 470 billion Yen (unchanged), as opposed to 504 billion Yen during the previous Fiscal Year [88 billion Yen left to reach goal]
• Operating income: 30 billion Yen > 20 billion Yen (-10 billion Yen / -33.3%), as opposed to 32 881 million Yen during the previous Fiscal Year
• Ordinary income: 10 billion Yen > 30 billion Yen (+20 billion Yen / 200%), as opposed to 28 790 million Yen during the previous Fiscal Year
• Net income: 50 billion Yen > 90 billion Yen (+ 40 billion Yen / +80%), as opposed to 16 505 million Yen during the previous Fiscal Year

As for Wii U and Nintendo 3DS:

• Nintendo 3DS: 6 million units > 7.2 million units (750 000 units left for Nintendo to reach its target)
• Nintendo 3DS Software: 55 million units, unchanged (8 220 000 units left for Nintendo to reach its target)
• Wii U: 800 000 units, unchanged (40 000 units left for Nintendo to reach its target)
• Wii U Software: 14 million units, unchanged (1.52 million units left for Nintendo to reach its target)

Source: Nintendo (1 / 2)