Nintendo Wiifs; iPad No Threat to DS, Says Exec
Surging sales of its Wii and DS led Nintendo to three straight years of record profits. But with the appeal of those devices now waning, the company needs to refresh them both lest it continue to post financials like those it announced today.
This morning, the videogame company reported its first full-year drop in revenue in six years, one in which revenue fell 22 percent to 1.43 trillion yen and operating profit dropped 36 percent to 356.57 billion yen.
Driving the declines: Wii sales that were down 21 percent year-over-year to 20.53 million. With global sales of the console expected to fall again this fiscal year–to 18 million units–the company is in desperate need of something to revive them.
Though it still leads in this generation of gaming hardware, Nintendo is struggling to maintain its momentum. With rivals like Microsoft (MSFT) working on Project Natal and other innovations, it is becoming increasingly clear that the Wii, now about four years old, needs a full-on refresh and not just new peripherals like the silly vitality sensor the company showed off last year.
With Apple’s (AAPL) iPhone and iPad making big inroads in portable gaming, the new 3-D version of the DS Nintendo is planning can’t come to market soon enough, though the company’s executives insist it’s holding its own.
Said Nintendo of America President and COO Reggie Fils-Aime: “We have not seen any impact on our DS business [from the iPad]. In the first three months, we’ve set two new sales records for the Nintendo DS. We think that through April, we’ll have the best four-month time period to kick off a new calendar year that we’ve ever had with the device. So we’re certainly seeing momentum, they’re seeing momentum–I think two products can succeed at the same time.”