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Nintendo reveals lower sales than expected

Article By: ,  Financial Analyst
May 8, 2014 1:15 PM

Nintendo's share price has fallen today (May 8th) following the release of the company's latest financial results, which indicated sales are lower than expected.

It was announced by the firm that sales units of the Nintendo 3DS hardware, as well as the Wii U console and software, did not reach their expected levels and this led to lower sales overall.

Nintendo said: "The operating loss increased from the forecast due to the increase in inventory write-down and research and development expenses compared with the forecasts in addition to the decrease of net sales."

As a result, Nintendo reported a net deficit of 23.2 billion yen (£135 million) for the 12 month period. However, the Japanese company did note that it predicts the release of forthcoming games is going to help it to turn around its fortunes in the coming months.

Health focus

Earlier in the year, Nintendo announced a new focus on health, but Piers Harding-Rolls, head of games at consultants IHS, told the BBC it is going to be a long time until this move starts to yield solid results for the Japanese company.

He pointed out that while it is too early to write off the future of Nintendo, the decision not to host a press conference at E3 – Los Angeles' Electronic Entertainment Expo – this year is likely to be a significant one in terms of the company's progress.

"The quality-of-life initiative, I think, is still in its embryonic phases and I don't think we will see any concrete development in that area for a number of quarters,” said Mr Harding-Rolls. “Its strategy reveals a company that is looking for new opportunities to grow its business – and trying to develop a new market from scratch holds significant risk."

Shares in Nintendo fell by 1.64 per cent on the back of the sales figures and the company has made further negative headlines with a statement from the firm revealing it will not allow people to play as gay characters in its new life-simulation game Tomodachi Life.

"The relationship options in the game represent a playful alternate world rather than a real-life simulation," Nintendo of America Inc, said in a statement.

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