Nintendo posts a full-year profit as handhelds lift overall sales

Returning to a full-12 month profit after some rough times, Nintendo reported fiscal year earnings that slightly beat the financial community’s estimates.

Quarterly revenues were 106.8 billion yen ($890 million) for the fourth fiscal quarter ended March 31, compared with 72.61 billion yen ($610 million) a year earlier. Analysts had expected to be 94.13 billion yen ($790 million) in revenues for the quarter. Foreign exchange rates also helped improve Nintendo’s profit picture.

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The Japanese company reported net income of 17.6 billion yen ($150 million), compared with a loss of 33.42 billion yen ($280 million) a year earlier. Nintendo was expected to post a loss of 19.18 billion yen, or $159.67 million, for the fourth quarter.

Industry observers will closely monitor the Kyoto, Japan-based company’s results for any mention of its next-generation game console, dubbed the NX, which is expected next year, and for any update to its alliance to build mobile games with Japan’s DeNA. Nintendo announced this deal in March, partly as an admission that it had failed to capitalize on the smartphone gaming craze, which now generates more than $10 billion a year in revenue for developers on iOS and $7 billion in revenue for Google Play developers.

For the full year, analysts expected net income of 40.82 billion yen, compared to a net loss of 23.22 billion yen a year earlier. Full year revenue was expected to be 541.1 billion yen, compared with 571.73 billion yen a year earlier. Actual revenue for the full year came in at 549.78 billion yen, and net income was 41.8 billion yen.

Nintendo also had a good year thanks to sales of Nintendo’s game-compatible figurines called Amiibo. Meanwhile, Nintendo’s Wii U game console is still lagging far behind sales of the rival Sony PlayStation 4 and Microsoft Xbox One game consoles.

In a statement, Nintendo said that sales of the new 3DS and 3DS XL handhelds were off to a good start at launch and continued to sell well throughout the year. Nintendo said it sold 8.73 million 3DS units during the fiscal year and 52 million to date. Nintendo also sold 9.94 million units of its Pokémon Omega Ruby/Pokémon Alpha Sapphire games, and it sold 6.75 million units of Super Smash Bros. for the Nintendo 3DS.

Tomodachi Life, Mario Kart 7, and The Legend of Zelda: Majora’s Mask 3D sold more than 2 million units each. Overall software sales for the year were 62.74 million units.

Mario Kart 8 on the Wii U console sold 5.11 million units during the year, while Super Smash Bros. for Wii U sold more than 3.65 million units. Wii U hardware sales during the year were 3.38 million units, and Wii U software units were 24.4 million.

Upcoming 3DS exclusives include Xenoblade Chronicles 3D, Rhythm Tengoku, and New Fire Emblem Game. On the Wii U, Nintendo is preparing to launch Splatoon, Yoshi’s Woolly World, and Mario Maker.

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Regarding smartphones, Nintendo said, “In addition, a new source of revenue is expected from a gaming application for smart devices which will be released this year. Based on these efforts, we project, for the fiscal year ending March 31, 2016, net sales of 570 billion yen, an operating income of 50 billion yen, ordinary income of 55 billion yen and profit attributable to owners of parent of 35 billion yen.”