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Thursday, January 26, 2012

Nintendo's Bad Year

Nintendo released its financial results for the year. It doesn't look good. Some quick hits:
  • They had a net loss of 600 million dollars.
  • They had originally planned to sell 15 million 3DS units during this season. They sold 11 million.
  • They expected to sell 10 million Wiis. They sold about 9 million.
The glass-half-empty people say this: This is their first loss in 30 years, and it happened after they released their crappiest handheld ever, then cut the price almost in half. The Wii is weak and no one wants to make games for it. It's time for Nintendo to go third-party.

The glass-half-full people say this: This is their first loss in 30 years, so they have a long time of being profitable behind them. The 3DS is rebounding after a sluggish start, and while the Wii has seen better days it's still sold 95 million units overall. Plus, they have a new console coming out in 2012, so Nintendo will be fine.

So what's the truth? It's a little closer to the latter than the former. Nintendo screwed up during the launch of the 3DS. No one denies this.

The Wii is also poised for an awful year. There are only two games of note that are coming out in NTSC territories: Rhythm Heaven Fever and Xenoblade Chronicles. People still buy the things, though, and new users have quite a few games to pick from.

Nintendo's outlook for fiscal year 2012 may be ugly, is what we're trying to say. Does that mean that Nintendo's screwed? Well, no. A loss is bad, but this is after the end of 30 years of profit. Nintendo's got money squirreled away in spades.

The knee-jerk reaction with news like this is always to jump to worst-case scenarios or rush to defend Nintendo. Look, Nintendo doesn't need your pity, scorn or any other emotion. They'll be fine. They've been around for about 100 years, doing their own thing. One bad year isn't going to bring the whole company down.