When Nintendo announced they would be substantially dropping the price of their 3DS handheld it was a move to entice uninterested consumers but also a major risk for the company. In essence, Nintendo would be taking a huge loss on the handheld in the hopes that, if the price cut stimulated sales, things would inevitably balance out. However, as the company has just revealed, things didn’t turn out exactly as expected.
Despite the 3DS now selling well Nintendo is still posting some pretty sizeable losses for the first half of the 2012 fiscal year (which ends in March of 2013), and unfortunately they are now much higher than Nintendo initially assumed they would be. Furthermore, Nintendo is lowering its net profit outlook by nearly 70 percent, a result of $350 million in first-half losses.
Nintendo is citing the poor performance of the 3DS overseas as a major cause for the huge losses and change in projections — as Japanese consumers appear to be less interested in the hardware, and by extension the software, than Nintendo initially anticipated. The 3DS has crossed 22 million units sold worldwide, but Nintendo is also lowering overall sales projects for the handheld by 1 million.
It’s not all bad news, though, as the company is reporting they expect 5.5 million Wii U consoles to be sold before the end of the fiscal year – the console launches in November – which should presumably help correct this downward trend. Moreover, if sales of the Wii U are at the level that pre-orders suggest they are, the console could, as Joystiq reports, bring the company back into the black.
It’s hard to nail what exactly resulted in the 3DS not striking fire like Nintendo had hoped, but most will point to the lack of enticing launch content as a major factor. It was only when Ocarina of Time 3D launched that hardcore gamers even took notice of the system.
A similar situation is at play with the Wii U, but thankfully Nintendo has ensured, at the very least, there will be plenty of launch content, even if a lot of it is multiplatform stuff. Games like Assassin’s Creed 3 and Black Ops 2 are going to be major players in a few weeks, and simply by virtue of offering those games Nintendo is sure to move a few extra consoles.
Do you think that Nintendo has lost the luster they once had? Or are they poised to make a comeback with the launch of the Wii U?
The Nintendo Wii U releases on November 18, 2012.