You have not played any game recently!

Remove ?

You are removing the game from your account and My Games . Depending on the developer, your game progress may be permanently deleted.

Note: may still retain some data you shared with them directly or during game play. Please visit () privacy policy for details about having your data deleted.

Plugged In

Nintendo slashes fiscal forecast on lousy Wii U sales

Plugged In

View photo

.

(Credit: Getty Images)

Stung by a rough holiday season and consumer apathy towards its latest console, Nintendo has slashed its financial forecast for the fiscal year ending March 2014 and cut its Wii U sales estimate by over two-thirds.

Nintendo said early Friday that it no longer expects to earn 55 billion yen this quarter. Instead, the company says, it will lose 25 billion yen. To put that into context, it’s a shift from a $527 million gain to a $240 million loss. Ouch.

The company also drastically reduced its upcoming Wii U sales forecast, dropping it from 9 million to just 2.8 million -- a 70% reduction -- and conceded that the holiday season was a bust. With this announcement, the company now expects to have life-to-date Wii U sales of 6.25 million units by March 31. The PS4, by comparison, sold 4.2 million units in just six weeks, while the Xbox One moved 3 million in that time. The Wii U was released in November of 2012.

Nintendo’s bullish attitude has even affected the successful 3DS handheld system. Despite besting all other game systems in 2013 in terms of units sold, sales are tracking lower than expected. In turn, Nintendo has lowered its 3DS hardware sales estimate from 18 million units to 13.5 million.

The company's stick price plummeted roughly 20% on the news.

The reduced forecast not only shows the company’s vulnerability in this console generation, but it puts more pressure on president Satoru Iwata, who less than four months ago vowed to hit the company’s fiscal targets. In a press conference in Osaka, the embattled president noted that while the company has failed to meet expectations, he won’t resign.

Pundits have put some of Nintendo’s troubles on the explosive growth of the mobile games market. Nintendo has thus far patently refused any move to non-Nintendo devices, though Iwata sounded a bit more open to the idea today.

“We are thinking about a new business structure,” he said during the press conference . “Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business. It’s not as simple as enabling Mario to move on a smartphone.”

Bloomberg notes that Nintendo has lost 80 percent of its market value since the introduction of the Wii in 2006.

Ironically, the company’s financial woes come as NPD reports that the Wii U had its best month ever in December. That wasn’t enough to reach the unreasonably high expectations Nintendo set for investors, though, something analysts have been warning for months was bound to haunt the company.

“Guidance for the Wii U is too aggressive in our view,” wrote Wedbush Securities’ Michaeld Pachter in October. “Although management confidence is important, sales can only materialize if consumers feel the same way about the release schedule. We think that Nintendo has a very low probability of meeting its Wii U forecasts, as it expects the installed base to more than triple by year-end, with very bullish software guidance layered on top.

“We think the Wii U is the wrong product for consumers, and although we believe that Nintendo faithful will buy the console if it is the only way they can play beloved Nintendo software titles, we think that there are fewer of these faithful than management is counting on to hit its full-year guidance.”

A $50 price cut helped boost Wii U sales in September, but wasn’t enough to turn things around for the company. At this point, we’re not sure what will.

For game news, free codes and more, Like us on Facebook and follow @yahoogames on Twitter!

View Comments