chidori-chan2 said:
http://www.engadget.com/2014/07/30/nintendo-earnings-2014/
Which is, well, exactly how you work out an operating loss. The company is now betting on the power of Super Smash Bros. as well as the best-selling Pokemon series to improve results later this year. Wii U console sales have improved in the Americas and Europe: 510,000 units were sold worldwide in the last three months, compared to 160,000 in the same period last year. In Japan, however, Wii U sales have decreased year-on-year. Revenue was 8.8 percent higher than the same period last year and Nintendo is hoping its plans for a series of console-connected toy figurines along the lines of the hit Skylanders series will help to improve that bottom line.
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This is an example of a sad lack of understanding of business.
First of all, the primary reason for this difference is that, last year, Nintendo released Animal Crossing: New Leaf within the period in NA and Europe, and within those three months, it sold 5.4 million copies. Tomodachi Collection released in Japan, and Luigi's Mansion: Dark Moon released just a few days before the start of the quarter. These were the primary drivers of sales within Q1 FY2014. And even then, the only reason for Nintendo making a profit within that quarter was exchange rate.
On the flipside, the only notable release in or near Q1 FY2015 was Mario Kart 8, which released two months into the quarter, and the majority of the loss was due to exchange rate (9.9 billion yen net loss, of which foreign exchange losses were just over 5 billion yen).
And that's how this sort of thing typically happens. Nintendo's gross profit dropped by just 4 billion yen, which isn't a huge drop in the scheme of things - it's still up by a factor of three relative to FY2012 (April-June 2011). The issue was that the administrative costs stayed roughly the same... which isn't too surprising, given that they're in the process of a restructuring, they're building offices, etc.
And as someone above me has already pointed out, it's not unusual for Q1 to see losses - they're spending a lot, but not releasing a lot. They're setting up their advertising campaigns for the holiday season, they're organising their new financial year, and they're getting active in things like E3, all of which cost money. Note that they had a big promotion in connection with Mario Kart 8 that basically reduced their net profit from each sale, too. Nothing at all is surprising about this meagre net loss (saying "$97 million" makes it sound big, but consider that their cash reserves are about $5 billion).
The article is also a demonstration of blatant bias. Nintendo saw their Wii U sales go up from 60,000 in Q1 FY2014 to 280,000 in Q1 FY2015 in the Americas. In "Other" (includes Europe), it went up from 10,000 to 170,000. In Japan it dropped, yes... but from 90,000 to 60,000. Which isn't too surprising - the Japanese scene is pretty slow across the board. But it's presented as "yes, Wii U sales are up, but it's declining in Japan." (note the emphasis). The article treats a better-than-tripling of worldwide sales as a minor point, and then acts as though the slight decline in Japanese sales is some important point. They then draw conclusions about Nintendo's goals based on their own speculation, but print it as though it's some official attitude... and then dismiss the Wii U as "possibly a second console" (linking to an article comparing PS4 with Xbox One).
Seriously, the gaming media disgusts me sometimes.
