Hardware, Software Declines

DS, Wii Sales Tumble, Hurting Nintendo’s Fiscal Year Results

May 7, 2010 by Jeff Berman|Top News

Despite remaining the best-selling handheld and home videogame systems, shipments of DS and Wii hardware and software tumbled in Nintendo’s fiscal year ended March 31 compared to the prior year, hurting its revenue and earnings, it said Thursday.

DS hardware shipments fell to 27.1 million units in the fiscal year from 31.2 million the prior fiscal year, while DS software shipments fell to 151.6 million copies from 197.3 million, Nintendo said. Wii hardware shipments tumbled to 20.5 million from 26 million, while Wii software shipments dipped to 191.8 million from 204.6 million.

Profit fell 18.1 percent to 228.6 billion yen as revenue tumbled 22 percent to 1.4 trillion yen. It was the first time that Nintendo’s profit fell in six years, but Nintendo said it was still “the third best fiscal year in its history, despite declines in both sales and profits from records set in the preceding fiscal year."

The revenue and earnings declines were “primarily the results” of “decreases in Wii hardware and Nintendo DS hardware and software sales, a price cut for Wii hardware, and the significant impact of a stronger yen,” Nintendo said. Wii hardware sales “lagged until the holiday selling season,” it said. There were also “fewer strong Wii software titles in the first half” of the year, it said.

Wii hardware sales improved in Japan to 2.4 million from 2.1 million the prior fiscal year, but weakened to 9.9 million in the Americas from 12.9 million the prior year and slowed to 8.3 million in Europe and other markets from 11 million, Nintendo said. DS hardware sales were flat in Japan at 4 million, and increased only slightly in the Americas to 12.3 million from 12 million, while falling to 10.8 million from 15.1 million in other markets despite the DSi XL launch.

Best-selling DS games in the fiscal year included Pokemon HeartGold and Pokemon SoulSilver, which moved a combined 8.4 million copies globally, The Legend of Zelda: Spirit Tracks (2.6 million) and Tomodachi Collection in Japan (3.2 million), Nintendo said. The number of DS games selling at least 1 million copies to date grew to 114 from 91 at the end of the prior fiscal year, it said. Best-selling Wii games for the year included Wii Sports Resort (16.1 million), Wii Fit Plus (12.7 million) and New Super Mario Bros. Wii (14.7 million). The number of Wii games selling at least 1 million copies to date grew to 79 from 54, Nintendo said.

Global life-to-date DS hardware shipments increased to 129 million as of March 31, while cumulative DS software shipments increased to 718 million copies, Nintendo said. Global life-to-date Wii hardware shipments passed 70 million units as of March 31, while Wii software shipments passed 544 million, it said.

Of the 129 million DS systems sold to date, 46.8 million were in the Americas, 30 million in Japan and 51.7 million in other markets, Nintendo said. More than 17.8 million of the 129 million were the DSi, including 7 million in the Americas, 4.8 million in Japan and 6.1 million elsewhere.

Nintendo provided sales data for its newest DS system, the DSi XL, for the first time, saying 2.1 million had been sold globally. That included 1 million in Japan, where it went on sale in late 2009, and 420,000 in the Americas and 620,000 in other markets since launching this year, it said. Of the 70.9 million Wii consoles sold to date, 33.4 million were in the Americas, 10.3 million were in Japan, and 27.2 million were in other markets, Nintendo said.

Nintendo expects to ship 30 million DS hardware systems and 150 million DS software copies this fiscal year, along with 18 million Wii hardware systems and 165 million Wii software copies, it said. The DS forecast included all DS SKUs, including the coming “Nintendo 3DS” handheld system that the company said in March will offer stereoscopic 3D effects without the need for gamers to wear special glasses (CED March 24 p1). It is expected to be shown publicly for the first time at E3 in Los Angeles next month.

The company expects profit to fall 12.5 percent to 200 billion yen, and revenue will dip 2.4 percent to 1.4 trillion yen, for the fiscal year ending March 31, 2011, it said.

Nintendo plans to expand the Nintendo Zone service that uses the wireless function of the DS so it can continue to provide content such as free downloadable DS software and the Wi-Fi Connection feature, it said.