Results from Microsoft and Nintendo's Latest Quarters

RC Cola · Apr 26, 2007

http://www.gamasutra.com/php-bin/news_index.php?story=13682

Officials from Nintendo have reported the company’s final consolidated financial results for the financial year ending March 31st. During this period, the company saw a rise in operating profits of 90 percent and a surge in revenue of 150 percent, an extremely impressive result.

The revenue figure of ¥966.5 billion ($8.10bn) is an all-time high for the company, as is the operating profit of ¥226.0 billion ($1.91bn). Net profit rose by 77 percent to ¥174.3 billion ($1.47bn).

The company has also updated its sales figures for the Wii, with a total of 5.84 million units sold worldwide – described as “virtually every one” of the stock then available. A total of 29 million Wii games have been sold worldwide, resulting in an attachment rate of almost 1:5.

However, the company has attributed the majority of its current success to the performance of the Nintendo DS, which sold 23 million hardware units in the last year and 123 million units of software. The format now commands a global userbase of over 40 million, after just over three years on sale. Total lifetime sales for software is now just under 184 million, resulting in an attachment rate of 1:4.6.

The company also pointed to a general recovery in the Japanese economy for the improved results, with a local games market which is now expanding after several years of decline. Non-Japanese sales accounted for 66.5 percent of all company revenues for a total of ¥643.0 billion ($5.42bn) - ¥354.7 billion ($2.99bn) in the Americas and ¥266.1 billion ($2.24bn) in Europe.

The strongest performers of the year for the company were New Super Mario Bros. on Nintendo DS, which has now sold 9.5 million units worldwide, and Brain Age (aka Brain Training), which sold 8.08 million units worldwide, for a lifetime total of 12 million units which includes the Japanese-only sequel.

Nintendogs also continued to perform well with 6.95 million unit sales for the year, for a lifetime total of 13.6 million. Pokemon Diamond/Pearl, released only in Japan during the 2006 fiscal year, has so far sold 5.21 million units.

For the new fiscal year beginning April 1st, Nintendo has projected sales of 14 million Wii consoles and 55 million games worldwide. A further 22 million Nintendo DS sales are expected and 130 million software sales.

Consolidated sales are expected to increase by 18 percent to ¥1.14 trillion ($9.62bn) and operating profits are predicted to increase by almost 20 percent to ¥270 billion ($2.26bn).

These projections are based on an exchange rate of ¥115 to $1 and ¥150 to €1. As a result, and bearing in mind Nintendo’s significant foreign property and currency holdings, recurring and net profits for the year are expected to remain flat.
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If you don't want to read all that, here is the basic breakdown:

Fiscal Year (06-07) Net Profit ¥174.29 billion (~$1.5 billion)

Gameboy Advance HW / SW
Japan 16,660,000 / 72,360,000
The Americas 41,100,000 / 208,570,000
Other 21,710,000 / 85,320,000
Total 79,460,000 / 366,250,000
Shipment forecast April 2007 - March 2008: nil / 8,000,000

Nintendo DS HW / SW
Japan 16,020,000 / 75,110,000
The Americas 11,740,000 / 58,030,000
Other 12,520,000 / 50,850,000
Total 40,290,000 / 183,980,000
Shipment forecast April 2007 - March 2008: 22,000,000 / 130,000,000

Gamecube HW / SW
Japan 4,020,000 / 27,410,000
The Americas 12,810,000 / 136,130,000
Other 4,760,000 / 42,340,000
Total 21,590,000 / 205,880,000
Shipment forecast April 2007 - March 2008: nil / 3,500,000

Wii HW / SW
Japan 2,000,000 / 6,120,000
The Americas 2,370,000 / 14,490,000
Other 1,470,000 / 8,230,000
Total 5,840,000 / 28,840,000
Shipment forecast April 2007 - March 2008: 14,000,000 / 55,000,000

NSMB 9.5 million
Brain Age 8.08 million
Nintendogs 13.6 million
Pokémon Diamond/Pearl 5.21 million
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Really positive quarter for Nintendo as you can tell, although they did miss their goal of 6M Wiis. Still, software numbers are really solid and the DS is doing phenomenally well.

http://www.gamasutra.com/php-bin/news_index.php?story=13698

Microsoft has released its third quarter results, showing the company's Xbox-encompassing Entertainment and Devices division posting a $315 million loss and sales slipping 21 percent to $929 million, as the overall company saw $4.93 billion in profits and $14.40 billion in sales.

The $315 million loss is down 22 percent from last year's $402 million, and came as the quarter saw $929 million in sales, down 21 percent over last year's $1.18 billion.

Microsoft says the drop in sales came primarily because of decreases in the sale of Xbox 360s. During the quarter, the company shipped a half million consoles, as compared to 1.7 in the third quarter of 2006, that being the first full quarter in which Xbox 360s became available.

Sales of Xbox and PC games decreased 44 percent over the company's first three quarters to $393 million, which the company puts hand in hand with the decrease in console sales.

Quarterly losses were blamed on expenses related to the launch of Microsoft's Zune media player, as well as expenses from a lengthening of the Xbox 360's warranty period. For the first nine months of Microsoft's fiscal year, decreased losses were also chalked up to an overall increase in Xbox 360 sales and improved margins on the console.

Looking forward to the full fiscal 2007 year, Microsoft has said it expects increased sales due to the increased availability of Xbox 360 over the year, as well as sales of its Zune.
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Due to overshipping in previous quarters as well as the introduction of the Elite SKU, 360 shipment numbers took a big hit this quarter. Given their wording, it appears as though the 360 is still losing money (perhaps a large amount too?). I thought they would have at least broken even by now, but I guess not. They probably will have to wait until 65nm before they can put in a price cut (and probably not initially after that move either).

I believe Sony doesn't report their info until May 16th, so I guess that's it for now.

A_3PO · Apr 26, 2007

It's Nintendo's own fault they missed the Wii's goals. When are they expected to have enough production to meet demand? This summer? By Christmas?

RC Cola · Apr 26, 2007

They're working on increasing production (they expect to ship 14M for the next fiscal year). Not sure if that will get the job done given the demand though. I know one analyst expects supply to not meet demand until 2009.

Nintendo should have easily hit their 6M goal (especially if Sony can hit that goal with the PS3, although they may fall short as well), but they were close enough. I wish they would improve production though. It seems like they're almost hesitant to produce too many (maybe to create hype or something).

Invisible Fan · Apr 26, 2007

Nintendo's games portfolio must look scary to their competitors. After all this time, a Pokemon and Super Mario Bros. title still dominate the charts.

A_3PO said:

It's Nintendo's own fault they missed the Wii's goals. When are they expected to have enough production to meet demand? This summer? By Christmas?
Click to expand...

I think they delayed production when they found out about the mod chips floating around the net. They shifted the Wii's innards around with a revision, so changing their factory specifications probably took some time...

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