A running narrative has been reporting that Nintendo's business outlook is not good, an opinion supported by the poor hardware sales of the Wii U. The company's latest financial statement confirms that notion, claiming a $457 million loss for the last fiscal year ending in March.
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Wii U's lifetime sales are up to 6.17 million, while Nintendo also reported moving 590,000 3DS units and 310,000 Wii U consoles last quarter. Those numbers would be decent for one month, but aren't going to do the famous Japanese game makers any favors over a three month period as it attempts to turn around its business.
The Wii U lifetime sales of more than six million have already fallen behind the PlayStation 4, despite its cheaper price and year-long head start.
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The 3DS has done well enough for Nintendo, supporting the extremely slow Wii U sales with 12 million units sold in the last fiscal year. The lack of desire for an underpowered console (compared to the new PS4 and Xbox One) combined with muddled marketing (most non-gamers I speak to aren't even sure what it is, for example) and limited software offerings have created a financial black hole for Nintendo. The company has said as much in its report:
"The global sales of the Wii U hardware and software [for the fiscal year] reached only 2.72 million and 18.86 million units respectively... 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."
Not only are the slow hardware sales hurting Nintendo, but a low sales pace for software is limiting revenue as well. Selling the console itself usually does not net Sony, Microsoft, or Nintendo the majority of the profits, but rather, gives them a platform on which to make the money back with software and peripheral sales.
If the platform isn't coming off the shelves, the largest source of profits doesn't really have a chance to reach consumers. Nintendo are in dire straits financially, and seemingly need to act soon to reverse its fortunes.
