Consolidated Results for the Three Months Ended June 2012

Key insights

7 takeaways

01
Nintendo posted a net loss of 17.2 billion yen for the three months ended June 30, 2012, an improvement on the 25.5 billion yen loss in the same period of 2011, but still under pressure from yen appreciation and a weak hardware transition.See it on page 1
02
Net sales fell 9.7% year over year to 84.8 billion yen, with overseas markets accounting for 61% of total revenue.See it on page 6
03
The company recorded an operating loss of 10.3 billion yen, worsened by 21.1 billion yen in foreign exchange losses.See it on page 5
04
Hardware volumes were mixed: Nintendo 3DS sold 1.86 million units worldwide, while the aging Wii fell to 0.71 million and Nintendo DS to 0.54 million.See it on page 3
05
Software held up better, with Nintendo 3DS titles selling 7.39 million units, helped by new release Mario Tennis Open and the continued strength of Mario Kart 7.See it on page 3
06
Nintendo's strategy centers on broadening its gaming population through the Nintendo 3DS XL, digital distribution of packaged software, and the global Wii U launch at the end of 2012.See it on page 3
07
Management kept its fiscal year ending March 31, 2013 forecast unchanged, targeting 820 billion yen in net sales and a return to profitability.See it on page 1

Summary

Nintendo reported a challenging financial performance for the three-month period ending June 30, 2012, characterized by a net loss of 17.2 billion yen. This result, while an improvement over the 25.5 billion yen loss recorded in the same period of 2011, reflects ongoing pressure from the appreciation of the yen and a difficult transition period for hardware sales. Net sales for the quarter reached 84.8 billion yen, a 9.7% decline from the previous year, with overseas markets accounting for 61% of total revenue.

The company’s hardware portfolio faced significant headwinds, with Nintendo 3DS sales reaching 1.86 million units worldwide, while the aging Wii and Nintendo DS platforms saw sales drop to 0.71 million and 0.54 million units, respectively. Despite these volume challenges, software performance provided some stability; the Nintendo 3DS software library saw 7.39 million units sold, bolstered by titles such as Mario Tennis Open and legacy hits like Mario Kart 7. The company maintained an operating loss of 10.3 billion yen, exacerbated by 21.1 billion yen in foreign exchange losses.

Looking ahead, the strategy remains focused on expanding the gaming population through product diversification and digital integration. Key initiatives include the launch of the Nintendo 3DS XL and the introduction of digital distribution for packaged software to enhance sales flexibility. Furthermore, the company is preparing for the global release of the Wii U system at the end of the 2012 calendar year. Financial forecasts for the fiscal year ending March 31, 2013, remain unchanged, with management targeting 820 billion yen in net sales and a return to profitability.