Monday 22 December 2014

DCC is set to score as Nintendo sales of Wii U flop and losses mount

Chang-Ran Kim

Published 18/01/2014 | 02:30

E3 Electronic Entertainment Expo...An attendee tries out the Nintendo Co. Wii U video game console at the E3 Expo in Los Angeles, California, U.S., on Tuesday, June 5, 2012. Nintendo Co., the worlds largest maker of video-game machines, unveiled software for the Wii U. Photographer: Patrick Fallon/Bloomberg...A
The global Wii U sales forecast has been cut by almost 70pc for the year-end to March. Photo: Patrick Fallon/Bloomberg

The global Wii U sales forecast has been cut by almost 70pc for the year-end to March. Patrick Fallon/ Bloomberg

Nintendo sales of its Wii U consoles have flopped, pushing it to a third consecutive annual loss and raising a question mark over its future in a market increasingly dominated by Sony and Microsoft. That's good news for Dublin-listed DCC, distributor of Nintendo rival Xbox.

Nintendo, which got its start making playing cards more than a century ago, slashed its global Wii U sales forecast for the year to March 31 by almost 70pc to 2.8 million units. It cut its sales forecast for its handheld 3DS to 13.5 million units from 18 million. The Wii U is the successor to its hit Wii console.

Nintendo's president, Satoru Iwata, who last year pledged to return the hobbled game maker to profit this business year, apologised to shareholders at a briefing in Osaka, but said his failure to fulfil his promise did not mean he had to resign. Pressure will probably mount on the architect of the Wii success in 2006 to step aside or shift course to focus on making money from "Super Mario" and other software titles. Nintendo so far has refused to allow its games to be played on machines built by competitors or on tablets or other mobile devices that are used by gamers.

In the past, the company has blamed a lack of titles for poor sales, but even its popular family-friendly games are losing out on sales to more hard-core titles like "Grand Theft Auto".

"The fact that the 'Wii U strategy' has failed is disappointing and will likely trigger a sell-off as soon as the market opens," said Makoto Kikuchi of Myojo Asset Management.

Nintendo this business year now expects an operating loss of 35bn yen (€247.12m) compared with an initial forecast for a 100bn yen profit. The new estimate is drastically short of the average forecast of a 54.7bn yen profit in a survey of 18 analysts by Thomson Reuters.

Irish Independent

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