Nintendo reports a small profit for fiscal year, but Wii U sales slow to a crawl

Nintendo had a difficult 12 months, but it managed to turn a profit despite the lackluster launch of its Wii U video game console.

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Nintendo reported a slight profit of $71.4 million for its full fiscal year ended March 31, compared to a loss of $434 million a year earlier. The Kyoto, Japan-based company also said that sales for the year were $6.39 billion, down 2 percent from a year earlier. But operating income was still in the red. Nintendo said its operating loss was $366 million, about flat compared to a year ago.

The company has been battered by competition from all sides. Beyond fierce competition from Sony and Microsoft, Nintendo has new competition from Apple’s iOS devices and others based on Google’s Android operating system. Gaming is still thriving, but the retail-focused console and handheld business where Nintendo is playing has stalled. After two full quarters on the market, Nintendo has sold 3.45 million Wii U consoles. By comparison, Apple sold 56 million iPhones and iPads in just the past quarter.

In a statement, company said it expects to return to operating profits by the end of the fiscal year ending March 31, 2014. And during the next several months, Nintendo expects to launch high-profile games including Mario Kart (Wii U), Super Mario Bros. (Wii U), Wii Fit (Wii U), Pikmin (Wii U), The Legend of Zelda (Wii U and Nintendo 3DS), Mario & Luigi (Nintendo 3DS) and Pokémon (Nintendo 3DS) franchises.

“These games, along with titles from Nintendo’s third-party publishing partners, will help drive hardware momentum and introduce new audiences to the Wii U and Nintendo 3DS platforms,” Nintendo said.

Consumers have purchased just 390,000 Wii U consoles since December.

The lone bright spot in the report: Revenue from digital software sales grew more than 110 percent from a year ago.

By the end of next year, Nintendo forecasts additional sales of just 9 million. That’s pretty weak for the launch of a new console, which will compete with Sony’s upcoming PlayStation 4 — and likely Microsoft’s next Xbox, with it’s announcing May 21. Nintendo said it has sold 13.42 million Wii U games to date, for a tie ratio of 3.8 games sold per console. The forecast for the next year is 38 million Wii U games.

The aging Wii console, first introduced in 2006, sold 3.98 million units in the past year, and it has sold 99.84 million units to date. Nintendo sold 50.6 million Wii games in fiscal 2013, and it has sold 869 million games for the Wii since 2006. It expects to sell 20 million more Wii games in the coming year.

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The Nintendo 3DS sold 13.95 million units in the fiscal 2013 year, and it has sold 31.09 million units to date. The forecast is for 18 million more in the coming year. The company sold 49.61 million 3DS games in fiscal 2013 and it has sold 95.03 million 3DS games to date. It plans on selling 80 million more in the coming year.

The older Nintendo DS sold 2.35 million units in fiscal 2013, and it has sold 153.87 million units to date. Nintendo is not making a DS forecast right now. The company has sold 33.38 million software units for the DS in the past year and it has sold 933.69 million to date. It expects to sell 10 million DS games in the coming year.

In other news, Nintendo said it promoted Tatsumi Kimishima, current chairman and CEO of Nintendo of America and a director of the parent company, to a new post. He will become managing director of NCL and relocate from Redmond, Wash., to the company’s headquarters in Japan. He will be general manager of corporate analysis and administration, and general manager of the general affairs division. Two executives are retiring: Yoshihiro Mori and Masaharu Matsumoto. Kimishima will assume his new duties in the summer in Kyoto.

Oddly, Satoru Iwata, global president of Nintendo, will assume the CEO title of Nintendo of America. That will help unify the company’s global strategy and allow for streamlined decision-making, the company said. Reggie Fils-Aime will continue in his role as president and COO of Nintendo of America, reporting to Iwata.

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