Nintendo bestowed itssix-month financial reportupon investors and it’s a lot like the flaming bags left by teenagers on doorstops. Continuing the trend from last quarter, net sales have been reported to be down 40% compared to the same period last year, with gross profit down nearly 80%. The downturn in sales was attributed to “a lack of hit software titles,” which really hurt them when they narrowed their profit margins by cutting prices on Wii and 3DS hardware.
So, it’s rough, right? You betcha. Satoru Iwata tried to smooth things over inhis presentationtoday, taking responsibility for failing to meet expectations — and for moving the goalpost closer with a newly modified forecast. He acknowledged that the company had lost momentum and said that to prevent this, they will be working on a schedule which ensures a steady stream of content throughout the year.
Iwata also presented a series of graphs comparing the launch of the 3DS with the Nintendo DS, and there are some notable aspects. In Europe, for example, the 3DS is performing about as well as the DS did. Japan and North America are lagging a bit behind, in no small part to the DS getting a two-month headstart on their launch. But the price cut is showing results and the rate at which sales have been increasing is a bit faster than the DS was managing.
Nintendo also does have the advantage of being Nintendo. Their first-party titles can sell well for years following release and never see a price drop. With the lineup they have coming and the inevitable increase in hardware sales which will accompany it, they’ll probably come out of it eventually.
