Nintendo posts third year of losses as Wii U misses targets, expects machine to increase sales in year ahead

Wii U fell just short of Nintendo’s already reduced sales forecasts in Nintendo’s last financial year, leading to a third straight annual loss for the firm.

In 2010 Nintendo posted its first ever annual loss, but a repeat in 2013 and yet again in its most recent year makes for a troubling hat-trick for the firm and heaps even more pressure on boss Saturo Iwata.

Net sales for the year ended March 31st 2014 reached 571,726m, down from 635,422m the year before. Operating losses increased from 36,410 last year to 46,425 while a net loss of 23,222 was also reported – last year it made a 7,099 net profit.

Total assets fell year-on-year from 1,447,878m to 1,306,410.

In January Nintendo revised its Wii U forecasts to 2.8m for the fiscal year, having until that point insisted it would sell 9m machines. Actual sales for the period fell short of even the revised prediction at 2.72m units, with software unit sales reaching 18.86m.

Of this, 1.29m were sold in America (down year-on-year from 1.52m), 890k in Japan (down from 920k) and just 55k (from 1.01m) throughout the whole of Europe.

Lifetime Wii U sales have now reached 6.17m.

3DS sold 12.24m units, taking its total lifetime sales to 43m units, while the Wii 1.22m and the DS 130k.

The Wii U hardware still has a negative impact on Nintendo’s profits owing mainly to its markdown in the United States and Europe, and unit sales of software, which has high profit margins, did not grow sufficiently,” the company said.

Wii U still faces a challenging sales situation. Nintendo will focus on efforts that seek to stimulate the platform.”

There’s no sign that Nintendo will abandon the hardware, however, although worryingly the messaging coming from Kyoto haven’t changed in the slightest – it’s still pledging to enrich the value” of the Wii U GamePad, utilise its built-in functionality as an NFC reader/writer” and seek to supply high quality games on a continuous basis”.

All of which is starting to sound quite empty and suggests that Nintendo still believes that marketing and communication lies at the heart of the challenge facing the Wii U.

Nintendo foresees a return to profit in the year ahead with expected operated income of 40bn and net income of 20bn.

Staggeringly, it actually expects to increase Wii U sales in the year ahead, with the unit sales forecast pitched at 3.6m units for the year ending March 31st 2015. Conversely, it expects 3DS sales to decline slightly to 12m units.