Consolidated Results for the Six Months Ended September 2015 and 2016

Key insights

7 takeaways

01
Nintendo reported a 33% decline in net sales to 136.8 billion yen for the six months ending September 30, 2016, resulting in an operating loss of 5.9 billion yen.See it on page 1
02
A 62.7 billion yen extraordinary gain from the partial sale of the Seattle Mariners enabled the company to report a net profit of 38.2 billion yen despite operational losses.See it on page 5
03
Foreign exchange volatility significantly impacted results, with a strengthening yen contributing to 39.9 billion yen in losses.See it on page 6
04
Nintendo 3DS hardware sales grew 19% to 2.71 million units, while Wii U hardware sales plummeted 53% to 0.56 million units due to a lack of major software titles.See it on page 3
05
The company maintains a stable financial foundation with 1.33 trillion yen in total assets and a capital adequacy ratio of 87.5%.See it on page 4
06
Strategic focus has shifted toward the March 2017 launch of the Nintendo Switch and expansion into the smart device market with titles like Super Mario Run.See it on page 3
07
Full-year fiscal projections ending March 31, 2017, target 470 billion yen in net sales and 30 billion yen in operating income.See it on page 1

Summary

Nintendo’s consolidated financial results for the six-month periods ending September 30, 2015, and September 30, 2016, reveal a period of significant operational transition and currency-driven volatility. During the first half of fiscal year 2017, the company reported net sales of 136.8 billion yen, a 33% decline compared to the same period in the previous year. This downturn resulted in an operating loss of 5.9 billion yen, exacerbated by a strengthening yen that contributed to 39.9 billion yen in foreign exchange losses. Despite these operational challenges, the company achieved a profit attributable to owners of the parent of 38.2 billion yen, largely due to a one-time extraordinary gain of 62.7 billion yen from the partial sale of its ownership in the Seattle Mariners.

Hardware and software performance varied significantly across platforms. The Nintendo 3DS family experienced a 19% increase in hardware sales, reaching 2.71 million units, bolstered by the success of Pokémon GO and titles like Kirby: Planet Robobot. Conversely, the Wii U struggled, with hardware sales falling 53% to 0.56 million units and software sales declining 33% due to a lack of major hit titles compared to the prior year. Amiibo figures and downloadable content also saw reduced performance during this period.

Looking ahead, the company is pivoting toward the launch of the Nintendo Switch, scheduled for March 2017, and continues to expand its presence in the smart device market with titles such as Super Mario Run. The financial forecast for the fiscal year ending March 31, 2017, reflects these strategic shifts, projecting net sales of 470 billion yen and an operating income of 30 billion yen. The company maintains a strong financial position with total assets of 1.33 trillion yen and a capital adequacy ratio of 87.5%.