The bad news: Nintendo took a sizeable loss in the second quarter of 2011. The good news: it wasn’t as bad as they initially thought.
Second quarter numbers are in and Nintendo has taken a $924 Million (70.2 billion yen) loss, a far cry from the $1.32 Billion that analysts were initially expecting. There’s a wealth of factors that Nintendo is contributing to this loss, most notably the strength of the yen versus the dollar and the 3DS price drop, making it not yet time for panic.
Since, as Nintendo points out, almost 80% of Nintendo’s come from overseas markets, where currency typically isn’t as strong as the yen, it does keep Nintendo from posting substantial gains from those sales. Add on top of that a price drop that was meant to counteract to a lack of interest in a gimmick-heavy console, and Nintendo was left with the feeling things might take a turn for the worse.
It’s not all doom and gloom for Nintendo, they do have a very strong fall season with the highly anticipated Legend of Zelda: Skyward Sword releasing, as well as a few flagship franchises hitting the 3DS. And, as it turns out, the 3DS has sold better than the DS did during its initial launch. Of course, that launch wasn’t followed closely by a price drop, but still that bodes well for the publisher.
Gamers might have scoffed at the idea of Nintendo's 3DS earlier in the year, especially at the lackluster launch line-up for the handheld, but as always is the case, they begin to come around. In fact, Nintendo is projecting that Christmas time sales numbers should see a profit of around 35 billion yen. Don’t think about pushing the panic button just yet, but keep your finger pretty close.
Do you think that with the high profile franchises releasing before year’s end, Nintendo will be able to post a profit? Are you interested in picking up a 3DS or Nintendo title this winter season?