Nintendo Financial Results – 1st Half 2016-17 (April – September)

Today, the Nintendo financials results for the First Half of 2016-17 were reveaked, and unfortunately, they’re not very good. While the company is still technically in the black (due to the sale of the Seattle Mariners), sales are down Year on Year.

Nintendo Financial Results – Raw Data

Let’s start with some raw data:

• Net Sales: 136 812 million Yen (1.204 billion € / 1.310 billion $ / 1 .073 billion £), a drop of 33.3% compared to H1 2015-16 (204 182 million Yen)
• Operating income: loss of 5 947 million Yen (52 million € / 57 million $ / 46 million £), as opposed to +8 977 million Yen in H1 2015-16
• Ordinary income: loss of 30 883 million Yen (271 million € / 295 million $ / 242 million £), as opposed to +16 436 million Yen in H1 2015-2016
• Profit attributable to owners of parent: 38 299 million Yen (337 million € / 366 million $ / 300 million £), as opposed to +11 466 million Yen in H1 2015-16
• Digital sales: 14.7 billion Yen (as opposed to 21 billion Yen during H1 2015-16)

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, Europe managed to increase its component ratio: 27.3% of total sales for H1 2016-17 come from that region (as opposed to 23.6% during the same period, last year).

Nintendo Financial Results – Hardware / Software Sales

• Nintendo 3DS: 2.71 million units for H1 2016-17 / 61.57 million units since launch;
• Nintendo 3DS (Software): 19.23 million units for H1 2016-17 / 293.4 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 Q2 2016-17):

• Nintendo 3DS XL – 19,961,000 (+22 000 units) [NB: this model seems to have been discontinued in Japan and North America]
• New Nintendo 3DS XL – 7 830 000 (+1.24 million units)
• Nintendo 2DS – 5,780,000 (+610 000 units)
• New Nintendo 3DS – 2,110,000 units (+90 000 units)

Nintendo Financial Results – Nintendo comments

For H1 2016-17, Nintendo notes the strong performance of Kirby: Planet Robobot, released worldwide (it’s sold over 1 million units). Hardware-wise, the Nintendo DS also growth, most likely thanks to the price drop in North America and the launch in Japan. There’s also the launch of Pokémon GO in July, which boosted Nintendo 3DS Hardware sales (especially outside Japan, as the impact was somewhat more limited in that region).

Overall, Nintendo sold a total of 2.71 million Nintendo 3DS between April and September 2016, which is 19% more compared to the same period last year. Software-wise, sales were steady with 19.23 million units sold.

As for the Wii U, Nintendo reminds us they have decided to ship only 800 000 units before the end of March 2016, and it looks like the forecasts were spot on. A total of 560 000 units were sold between April and September 2016, which is a drop 53% Year on Year. Software sales also took a hit, due to the lack of major titles like Splatoon and Super Mario Maker in 2015. As a result, they dropped by 33% Year on Year, with 8.3 million units sold.

Unfortunately, sales are also down for amiibo, due to the lack of new games compatible with them (and less figures released). They are as follows:

• figures: 3.8 million units
• cards: 1.7 million units

And of course, the lack of compelling DLC led to less sales for the digital business.

Finally, just like the past quarter, Nintendo suffered from the strong Yen. It’s particularly bad for them as 71% of their sales were made outside Japan. As a result, foreign exchange losses totaled 39.9 billion yen. Fortunately for them, the sale of the Seattle Mariners allowed them to avoid losing money during the first Half of 2016-17, with “sales of investment securities totaling 62.7 billion yen as extraordinary income”.

NB: the data above includes 12 billion Yen (100 million € / 114 million $ / 94 million £) from their shares in The Pokémon Company.

Nintendo Financial Results – Forecast

For the Nintendo 3DS, Nintendo mentions Pokémon Sun and Moon, releasing next month worldwide, but also Super Mario Maker for Nintendo 3DS, and “a range of strong third-party titles” launching before April 2017.

Of course, there’s also the Nintendo Switch, launching in March 2017 worldwide. But before that, there will be the Nintendo Classic Mini – Nintendo Entertainment System / Famicom launching on November 10th (Japan) / November 11th (Europe, North America).

On smart devices, there’s Super Mario Run in December (first on iOS), that will be followed by the Animal Crossing and Fire Emblem games before April 2017.

In the end, Nintendo to modify its forecast for the current Fiscal Year for several reasons:

• stronger Yen than anticipated
• weaker sales for the first Half of the Fiscal Year
• revised sales prospect for the second Half of the Fiscal Year
• the sale of the Seattle Mariners

Forecast

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

• Net sales: 500 billion Yen > 470 billion Yen (-30 billion Yen / -6%), as opposed to 504 billion Yen during the previous Fiscal Year [334 billion Yen left to reach goal]
• Operating income: 45 billion Yen > 30 billion Yen (-15 billion Yen / -33.3%), as opposed to 32 881 billion Yen during the previous Fiscal Year
• Ordinary income: 45 billion Yen > 10 billion Yen (-35 billion Yen / -77.8%), as opposed to 28 790 billion Yen during the previous Fiscal Year
• Profit attributable to owners of parent: 35 billion Yen > 50 billion Yen (+ 15 billion Yen / +42.9%) [4 billion Yen left to reach goal)

As for Wii U and Nintendo 3DS:

• Nintendo 3DS: 5 million units > 6 million units (3.29 million units left for Nintendo to reach its target)
• Nintendo 3DS Software: 55 million units (35.73 million units left for Nintendo to reach its target)
• Wii U: 800 000 units (240 000 units left for Nintendo to reach its target)
• Wii U Software: 15 million units > 14 million units (5.7 million units left for Nintendo to reach its target)

Source: Nintendo (1 / 2)