Pokemon Go Mania Arrived Too Late To Prevent Nintendo’s $49 Million Q1 Loss

It's still to be determined what impact Pokemon Go will have on Nintendo's bottom line, but whatever money it brings in will affect future earnings. Pokemon Go arrived too late to bolster Nintendo's three month period ended June 30, 2016. As a result, it posted an operating loss of 5.13 billion yen (around $48.5 million in U.S. currency) compared with a profit of 1.15 billion yen in the same quarter a year ago.

Net sales also saw a sharp decline, dropping 31.3 percent to around 62 billion yen, compared to 90.22 billion yen a year ago. That includes 25.1 billion yen in hardware sales, down from 44.6 billion yen a year ago, and 34.9 billion yen in video game software, down from 44.4 billion yen in the same period a year ago. The lone bright spots were smart devices and playing cards, though combined they only generated 2 billion yen.

Nintendo

Though sales were down in hardware and software, Nintendo placed the bulk of the blame for its poor performance on foreign exchange rates and "significant yen appreciation." However, that can't mask the dwindling interest in Nintendo's Wii U console—Nintendo sold just 220,000 Wii U units during its most recent quarter, down 53 percent compared to last year. That brings the total number of Wii U consoles sold to a little over 13 million.

The good news for Nintendo is that it has some potential money makers on the horizon. One of them is the company's mysterious NX console. Nintendo is keeping pretty tight lipped about what to expect, though Ubisoft CEO Yves Guillemot seems pretty excited about it, saying that what he's seen of it is "really great."

Pokemon Go

And of course there's Pokemon Go, the wildly popular mobile title that has everyone and their uncle wandering neighborhoods with smartphones in hand looking for Pokemon characters. It set a record in Apple's App Store as the most downloaded app during launch week and it was responsible for doubling Nintendo's market capitalization in less than two weeks as investors tripped over themselves to buy shares of the company.

Nintendo's share price has since taken a hit after investors realized that Nintendo's piece of the Pokemon Go pie is limited to its 32 percent stake in The Pokemon Company. Nintendo even took the unusual step of letting investors know ahead of its recent earnings report that, at least for now, it's not adjusting its forecast based on Pokemon Go's success because of it's limited interest in the title. Still, if Pokemon Go is able to keep its momentum going, Nintendo's relatively small slice of the pie could still end up being significant.

Via:  Reuters
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