Financial Results Briefing for the Six-Month Period Ended September 2010: Supplementary Information

The financial results for the six-month period ending September 2010 reflect a period of significant contraction for Nintendo. Net sales for the first half of the fiscal year reached 363.16 billion yen, a notable decline compared to the 548.06 billion yen reported during the same period in the previous year. This downturn culminated in an ordinary loss of 4.15 billion yen and a net loss of 2.01 billion yen, marking a sharp reversal from the profitability observed in prior fiscal cycles. The company’s operating income also fell to 54.23 billion yen, down from 104.36 billion yen in the prior year, resulting in an operating income ratio of 14.9 percent.

The decline in financial performance was heavily influenced by unfavorable foreign exchange fluctuations. Significant non-operating expenses, specifically 62.18 billion yen in foreign exchange losses, severely impacted the bottom line. While the company maintained a diverse portfolio of hardware and software, sales volume for the Nintendo DS and Wii platforms faced downward pressure. Despite these challenges, the company continued to see strong performance from key software titles, including Pokémon Black and White, which sold 4.07 million units globally, and Super Mario Galaxy 2, which reached 5.10 million units during the six-month period.

Geographically, the company’s operations remained focused on Japan, the Americas, and other international markets, with the Americas serving as a primary driver for software unit sales. The report outlines a strategic pivot toward the upcoming launch of the Nintendo 3DS, scheduled for early 2011 in Japan and international markets, alongside a robust lineup of third-party software titles intended to bolster the existing DS and Wii ecosystems. These results underscore the volatility inherent in the global gaming industry, particularly regarding currency exposure and the lifecycle transitions of hardware platforms.