Consolidated Results for the Three Months Ended June 2013 and 2014

Key insights

6 takeaways

01
Nintendo reported a net loss of 9.9 billion yen for the quarter ending June 30, 2014, a sharp reversal from the 8.6 billion yen profit recorded in the same period of 2013.See it on page 1
02
Net sales for the quarter fell 8.4% year-over-year to 74.6 billion yen, with the company recording an operating loss of 9.4 billion yen due to high administrative and selling expenses.See it on page 3
03
Overseas markets remain the primary revenue driver for the company, accounting for 77.7% of total net sales during the quarter.See it on page 6
04
Wii U hardware sales reached 0.51 million units, though the platform saw a significant boost from Mario Kart 8, which sold 2.82 million units.See it on page 3
05
The Nintendo 3DS platform moved 0.82 million hardware units and 8.57 million software units, supported by the release of Kirby: Triple Deluxe.See it on page 3
06
Management maintained its full-year financial forecast for the fiscal year ending March 31, 2015, banking on upcoming software releases and the launch of the amiibo figure line to drive second-half profitability.See it on page 3

Summary

Nintendo Co., Ltd. reported a challenging financial performance for the three-month period ending June 30, 2014, characterized by a decline in net sales and a shift into an operating loss. Net sales for the quarter reached 74.6 billion yen, an 8.4% decrease compared to the same period in 2013. The company recorded an operating loss of 9.4 billion yen and a net loss of 9.9 billion yen, a significant downturn from the 8.6 billion yen net profit reported in the prior year’s first quarter. This decline was primarily driven by high selling, general, and administrative expenses relative to gross profit.

The company’s hardware and software performance varied across platforms. While the Nintendo 3DS saw global sales of 0.82 million hardware units and 8.57 million software units, supported by titles like Kirby: Triple Deluxe, the Wii U platform faced a lack of hit titles, resulting in 0.51 million hardware units sold. However, the release of Mario Kart 8 provided a notable boost, achieving 2.82 million units in sales. Overseas markets remained critical to the company’s revenue, accounting for 77.7% of total net sales.

Despite the quarterly losses, management maintained its full-year consolidated financial forecast for the fiscal year ending March 31, 2015, citing expectations for robust profit generation in the latter half of the year. Strategic plans include the release of key titles for both the 3DS and Wii U, as well as the introduction of the amiibo character figure line to stimulate platform engagement. The company also implemented changes to its accounting procedures regarding retirement benefits, which had a minimal impact on the reported operating and ordinary losses for the period.