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Nintendo reports third consecutive annual loss as Wii U sales fizzle out

Nintendo reports third consecutive annual loss as Wii U sales fizzle out

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Nintendo made an annual operating loss for the third consecutive year in 2013, ending up ¥46.4 billion ($457 million) in the red as Wii U sales failed to pick up following the holiday season. The Kyoto company's net loss was ¥23.2 billion ($228 million). Total Wii U sales now stand at 6.17 million consoles worldwide, meaning that Nintendo sold just 310,000 in the quarter ended March 31st — a 20 percent drop on its performance a year ago.

PS4 has already overtaken the Wii U

This is in stark contrast to Sony's fortunes with the PlayStation 4, which had reached 7 million consoles worldwide as of April 6th; Sony has already overtaken the Wii U despite Nintendo's year-long head start. The 3DS handheld family sold 590,000 units in Nintendo's fourth quarter for a life-to-date total of 43.3 million, 2.2 million of which are of the lower-priced 2DS variant.

Nintendo expects to return to the black in its 2014 fiscal year, forecasting an operating profit of ¥40 billion ($394 million) with 3.6m Wii U and 12m 3DS consoles sold. Shareholders may not take the claim at face value, though — CEO and president Satoru Iwata maintained until January that the company would make ¥100 billion profit in 2013, before backtracking dramatically and predicting a ¥35 billion loss on poor Wii U sales. As it turned out, Iwata underestimated the loss by more than ¥11 billion.

Nintendo expects to return to the black in 2014

"Nintendo will focus on efforts that seek to stimulate the platform," the company said in its release, promising to expand Wii U sales "by providing software that takes advantage of the Wii U GamePad, utilizing its built-in functionality as an NFC reader/writer, and adding Nintendo DS Virtual Console titles to the Wii U software lineup."

If 'Mario Kart 8' doesn't sell systems, what will?

Despite the release of the excellent Super Mario 3D World, the Wii U software situation hasn't improved a great deal, and Nintendo needs to pick up the pace. This month sees the release of Mario Kart 8, the latest entry in a franchise which is as close to a guaranteed system-seller as anything in Nintendo's stable; the Wii version sold over 34 million units, and Mario Kart 7 for 3DS has sold over 8 million copies to date.

Mario Kart 8's release will leave Super Smash Bros. as the only major first-party Wii U title on the calendar, however, and Nintendo will be expected to reveal a convincing software lineup over next month's E3 conference. One thing's for sure — if Mario Kart 8 doesn't perform, it's hard to imagine what might convince customers to pick up a Wii U.