It’s no secret that many developers and companies have been struggling in the video game industry the past few years, from smaller companies like 38 Studios to, yes, Nintendo and other such huge moguls. Despite having such a high sell rate for their Wii console, Nintendo has been struggling along with the other companies, in part due to poor 3DS sales, I’m sure. For this reason, the quarterly financial results briefings are always worth checking out. Besides, they generally provide hints as to how some projects are progressing.
While the briefing explains that 3DS sales have recovered to the point of now being profitable, this is only a small ray of light lurking in the shadow of a bigger problem: Wii U sales. Perhaps the most interesting piece of information in the briefing, Nintendo explains that the Wii U will be sold below cost:
“the Wii U hardware will have a negative impact on Nintendo’s profits early after the launch because rather than determining a price based on its manufacturing cost, we selected one that consumers would consider to be reasonable. In this first half of the term before the launch of the Wii U, we were not able to make a profit on software for the system while we had to book a loss on the hardware, which is currently in production and will be sold below cost.”
Here are some other things that can be learned from Nintendo’s Second Quarter Financial Results Briefing:
- The Wii U deluxe set is selling out via pre-order more readily than the basic Wii U set, with GameStop having over 250,000 customer names on a waiting list. Furthermore, Nintendo aims to ship 5.5 million Wii U hardware units and 24 million Wii U software units in this fiscal year. (By comparison, they did something similar for the Wii, with 5.84 million and 28.84 million units, respectively.) The software units do not include those bundled with the hardware.
- One of the ways Nintendo hopes to bolster its sales is through digital downloads. The company plans to partner with retailers to allow them to sell digital copies of games in store, thus resulting in a broader market for Nintendo and a better relationship with retailers.
- There is also an Animal Crossing 3DS XL pack, which includes a special edition version of the handheld device that comes pre-loaded with a digital copy of the latest Animal Crossing game (still in development). (See what they did there?) According to Nintendo, retailers have already begun to sell out of these devices via pre-order.