Nintendo's profit for 2010 declines 66%

Nintendo's profit for 2010 slumped, despite the fact that the company managed to sell 3.61 million Nintendo 3DS portable systems. The Japanese games company profits plummeted during 2010, with a massive decline of 66% from 2009's fiscal year. As Engadget has reported, Nintendo's Wii sales have dropped between the two years by a quarter, with the console having sold fifteen million units during 2010, compared to the twenty million it sold during 2009. Multiple factors could have contributed to the decline in the sale of the Nintendo Wii, though it is most likely due to the success of both Microsoft's 'Kinect', and Sony's Playstation 'Move' perhiperals.

Nintendo has announced a successor to their Wii console, which is to release in 2012. With the console having sold in huge numbers since its release, the popularity of the successor, known at the time of writing as 'Project Cafe', should be interesting to see. During the fiscal year of 2010, the company made a net profit of $825 million, which is a large drop from their previous successes during 2009. Sales of the Nintendo 3DS went well, but the console does not appear as profitable as previous iterations in the Nintendo DS family.

Other sources give slightly different news as to the company's declining profit margin. According to DigitalSpy, Nintendo profits have nose-dived by 74%. DigitalSpy's article displays only until the end of December 2010, so it is possible that both Engadget and DigitalSpy have reported the falling profits correctly. Both websites may be correct in their reports, as it is possible consumers purchased Nintendo's DSi models towards the end of their lifespan in order to acquire the console at a low price, or as part of a 'bundle deal' at a retailer.

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66% of what? The previous year? Surly since the Wii was selling at a stupid rate in the previous years sales figures will go down eventually. Everything that goes up has to come down... apart from the cost of living it seems.

What Nintendo should so is very simple. Make a device that is a lil bigger than the iPod Touch. Make it 100% Touch with a connector at the bottom to slide into a dongle that has a joypad. Make sure it has 32GB of storage and make all the games downloadable.

Take every gameboy, SNES, NES and VB games they ever made and make them downloadable and have them work on the device and of course make new games. Then they will have a hot seller.

The name? Nintendo Wii Touch

Kinect and Move are popular where? I dont think either have taken any sales from the Wii, the Wii is marketed and priced to a different crowd. The 2 markets are totally unrelated, no one that considers a Wii seriously considered buying a PS3/360.

bits said,
The 2 markets are totally unrelated, no one that considers a Wii seriously considered buying a PS3/360.

Wouldn't say it applies to *everyone*, but certainly for me. Got a Wii for the little party/mini games (and Zelda and a few other Nintendo exclusive titles) Absolutely less than zero interest in a 360 or PS3, much prefer my PC for that sort of gaming, although I am tempted to get a Kinect once the SDK is finalized.

Fiscal year is April to April, that's why you get a p60 (in the uk) I think in April showing how much you've earned and how much tax etc you've paid in the previous year.

Nintendo still doing really well to make near a billion dollars after r&d costs and that

psionicinversion said,
Fiscal year is April to April, that's why you get a p60 (in the uk) I think in April showing how much you've earned and how much tax etc you've paid in the previous year.

Nintendo still doing really well to make near a billion dollars after r&d costs and that

Actually fiscal years for companies can be any month to any month - a lot of them do Janurary to Janurary, a couple I've heard of (not schools) are actually September to September.

The Wii's hardware is underpowered and most of the games are crap.
The 360 has a much better library, Kinect is popular, and the online community is thriving.
The PS3 is powerful, has a good library, and despite the recent fiasco, a pretty decent community.

It's not hard to understand why profits are declining.

Educated Idiot said,
The Wii's hardware is underpowered and most of the games are crap.
The 360 has a much better library, Kinect is popular, and the online community is thriving.
The PS3 is powerful, has a good library, and despite the recent fiasco, a pretty decent community.

It's not hard to understand why profits are declining.

Or in simpler terms: Wii = Old.
Kinect / Move = New.

Joker. said,

Will Nintendo do away with motion sensing?

They will make a new version, they won't do away with what made their product distinguishable.

Meh this is why I've always been against sales data which compares one instance previously, rather than in the context of a trend. It's hard to deny that the Wii craze has all but died but the fact that there even was one is pretty good. I also hope this version of the DS sticks around as I'm kinda tired of the Guitar Hero-esque flooding of that handheld.


Nintendo's profit for 2010 slumped, despite the fact that the company managed to sell 3.61 million Nintendo 3DS portable systems.


Now, unless "2010" includes the the first quarter of 2011, how does that even make sense? 3DS was released no more than 2 months ago

Julius Caro said,

Now, unless "2010" includes the the first quarter of 2011, how does that even make sense? 3DS was released no more than 2 months ago

I could be wrong here, but I believe the fiscal year ends with the first quarter of the next year. I'd assume that it also starts a quarter of the way into the next year. If that's right then the fiscal year is March in Year 1 to March in Year 2, if that makes any sense. I'm not certain though.

Julius Caro said,

Nintendo's profit for 2010 slumped, despite the fact that the company managed to sell 3.61 million Nintendo 3DS portable systems.

Now, unless "2010" includes the the first quarter of 2011, how does that even make sense? 3DS was released no more than 2 months ago


Read the Teej's post. Basically, tons of money is going towards R&D at the moment with no profits coming back out yet. This late into the process there are tons of resources going into the new console. When it comes out, assuming it sales like its other consoles, profits will sky rocket again from A. new product line and B. R&D process for new console starting over which means less resources going towards it.

ILikeTobacco said,

Read the Teej's post. Basically, tons of money is going towards R&D at the moment with no profits coming back out yet. This late into the process there are tons of resources going into the new console. When it comes out, assuming it sales like its other consoles, profits will sky rocket again from A. new product line and B. R&D process for new console starting over which means less resources going towards it.

I read his post, and it makes sense. And apparently the 2010 fiscal year in japan ended in march 31st. But fiscal years vary between countries and even the US one is totally different, it would have been nicer to clarify.

sigh sigh sigh

-OF COURSE- profits have slumped ridiculously. Go back to 2002/2003 - their profits slumped like mad. Why? Because of R&D and manufacturing of the Nintendo DS ramped up all the while the then unreleased DS wasn't making any money because it wasn't on the shelves. Same applies here - Project Café has been burning a pocket through Nintendo's pockets without any return because it's not on shelves making money. Usually their handheld segment backs up Nintendo, but this time around the DS was slowly declining (probably because the damn thing is now 7 years old) and the 3DS was also in development during 2010 which also contributed to burning pockets.

It all makes sense when you take a look at the broader scope of what Nintendo's doing rather then just taking a look at the "declining" sales (it's now only selling usual numbers instead of the sky rocket numbers it has been previously).

Of course, it's much more exciting for the dramatics to assume that Nintendo's now a sinking ship because the other two now have motion sensing and presume "Café needs to come out soon or Nintendo's doomed!".

still1 said,
2012???? by the time it comes out PS3 and Xbox will take over the gaming market.

What are you talking about, seriously. The Wii is still in production and it's still currently trouncing 360 and PS3 numbers LTD...

The Teej said,

What are you talking about, seriously. The Wii is still in production and it's still currently trouncing 360 and PS3 numbers LTD...


+1. Plus, it doesn't matter. A new console and new promotions make it profitable.
Best example: Windows XP and Windows 7.

still1 said,
2012???? by the time it comes out PS3 and Xbox will take over the gaming market.

According to Sony and Microsoft, they don't plan on releasing consoles next year, but instead have had a 10 year plan on their current generation consoles. It's not like they have anything to worry about. People are happy with the Xbox, and Sony has already made their console rather future proof. You think they're scared of Nintendo anymore?

Jose_49 said,

+1. Plus, it doesn't matter. A new console and new promotions make it profitable.
Best example: Windows XP and Windows 7.

Exactly. With Microsoft and Sony both relaxing, this would be the best time for Nintendo to pounce.

tmaxxtigger said,
I'm sure the mobile phone gaming world has played a big part in this too.

But...but...but...but...teh buttons!