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Nintendo turns its first annual profit since 2011

Nintendo turns its first annual profit since 2011

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Nintendo has turned its first annual profit following three years of consecutive losses. The Kyoto video games company made a slim operating profit of ¥24.8 billion (about $207 million) and a net profit of ¥41.8 billion ($350 million) off ¥549.8 billion ($4.6 billion) in revenue, making for the first positive balance sheet reported since 2011. Although sales were down 3.8 percent year on year, the positive impact of a weakened yen boosted the company’s bottom line to 39.5 percent more than forecast.

Customers still aren't convinced by Wii U

The Wii U sold just 340,000 units over the past three months, reaching a lifetime total of 9.54 million. That’s about 10 percent up on the same quarter last year, but it’s clear that a slew of solid software over the past 12 months hasn’t convinced many more consumers to get on board. Still, Nintendo expects to make an operating profit of ¥50 billion and net profit of ¥35 billion over the coming fiscal year, forecasting 3.4 million more Wii U sales.

Nintendo may have ended 2014 by posting a profit, but sustaining any momentum into 2015 will require a different kind of success. Wii U and 3DS sales are unlikely to increase significantly from here on out — though Nintendo says the New 3DS models are "off to a good start" — and the big-hitting cards like Mario Kart and Super Smash Bros. have already been played. Nintendo doesn’t have much of note on the calendar for 2015; with The Legend of Zelda for Wii U delayed into next year, the company will either have to rely on smaller titles like Splatoon and Mario Maker or announce some big surprises at the E3 trade show next month.

Still, the first mobile game to come out of the partnership with DeNA is set to hit this year, which could go either way; it could well boost Nintendo’s bottom line even without exciting the company’s traditional fans. We’re yet to hear anything about the game or even the business model there, though, so consider it a wildcard — alongside Amiibo figurines and the still-gestating "Quality of Life" initiative — for now. All Nintendo has to say in its earnings release is that "a new source of revenue is expected from a gaming application for smart devices which will be released this year."