When Nintendo announced it had lost ¥25.5 billion ($336 million) in July, it slashed its own profit forecasts for the rest of year by over 80 percent. Today the Mario Factory announced its performance in the most recent fiscal quarter failed to even hit those adjusted targets, with net losses hitting ¥44.7 billion ($589 million) for the quarter, taking net losses for the first half of the firm's financial year to ¥70.2 billion ($924 million). The firm had previously stated it expected net losses for the first half of the year to be in the region of ¥30 billion ($390 million)--meaning its losses in the second quarter were ten times worse than it forecast in July.
These losses were even higher than had been suggested in reports yesterday. Sources had indicated to Japanese financial daily Nikkei that an ordinary loss of ¥100 billion ($1.3 billion) was to be expected, compared to the firm's forecast ¥55 billion ($720 million) for the first half of the year--in actuality, the firm reported an ordinary loss of ¥107 billion ($1.41 billion). These losses were blamed on a multitude of factors including unfavourable exchange rate changes, declines in hardware and software sales, and decreasing margins thanks to price cuts and inventory markdown.
Nintendo did state that since the 3DS price cut sales "have been improving" but that progress had been hampered by a lack of hit titles, with the exception of The Legend of Zelda: Ocarina of Time 3D. During the six months to the end of September, 3.07 million 3DS handhelds were sold along with 8.13 million 3DS games. This compared to hardware and software sales for the DS range which were 2.58 million and 28.99 million respectively.
As a result, Nintendo has again revised its full-year estimates. It is expecting full-year net sales to be ¥790 billion ($10.4 billion), which is 12 percent lower than its July estimate of ¥900 billion ($11.9 billion). Sales for the previous year of in excess of ¥1 trillion ($13 billion). The firm has also wiped out its prediction of a full year profit: it now expects to post a net loss of ¥20 billion ($260 million), compared to its previous forecast of a ¥20 billion ($260 million) net profit. Last year the firm posted a full-year profit of ¥77 billion ($1 billion).
UPDATE: This story initially stated two currency conversions incorrectly. ¥25.5 billion is $336 million, not $336 billion, and ¥44.7 billion is $589 million, not $589 billion. We regret the errors.
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