Financial Results Briefing for the Six-Month Period Ended September 2011: Supplementary Information

The financial results for the six-month period ending September 2011 reveal a significant downturn in performance for Nintendo. The company reported net sales of 215.7 billion yen, a sharp decline from the 363.2 billion yen recorded during the same period in the previous fiscal year. This contraction in revenue, coupled with rising costs and unfavorable foreign exchange impacts, resulted in an operating loss of 57.3 billion yen and a net loss of 70.3 billion yen for the half-year. The gross profit ratio also experienced a substantial drop, falling to 14.8 percent compared to 41.0 percent in the prior year.

The decline in financial health is largely attributed to the transition between hardware generations and challenging market conditions. Sales data for the period highlights the shift in focus toward the Nintendo 3DS, which saw hardware sales reach 870,000 units in Japan and 710,000 units in the Americas during the second quarter. Meanwhile, legacy platforms like the Nintendo DS and Wii experienced diminished sales volume as the company prepared for upcoming software releases. Foreign exchange volatility further exacerbated these results, as the strengthening yen negatively affected the value of overseas earnings and increased the cost of foreign-denominated assets.

Despite these losses, the company maintained a robust software pipeline to drive future growth. The release schedule for late 2011 and 2012 features major titles such as Super Mario 3D Land, Mario Kart 7, and The Legend of Zelda: Skyward Sword. These efforts are supported by a diverse lineup of third-party software across the Nintendo DS, 3DS, and Wii platforms, intended to revitalize hardware adoption and stabilize financial performance in the subsequent quarters.