Nintendo, battered by slow Wii sales, to unveil new game console at E3
Battered by declining sales of its Wii video-game console, Nintendo on Monday announced it would introduce a new console in 2012. The announcement came as Nintendo posted double-digit declines in both sales and profit for its fiscal year ended March 31.
The Japanese game company said its revenue slumped 29% to just over one trillion yen, or roughly $12.4 billion, last year. Profit slid 66% to 77.6 billion yen, or $948 million. Nintendo had forecast for the year, issued last May, for sales of 1.4 trillion yen and net income of 200 billion yen.
It was the second year that Nintendo's earnings took a beating. During the previous fiscal year ended March 2010, sales were down 22% while profit fell 18%.
Losses due to the strong yen, which meant sales outside of Japan converted to fewer yen, accounted for $604 million of Nintendo's annual loss.
But the company's core sales of consoles and games also were to blame. After enjoying a massive wave of popularity, sales of the Wii fell 25% to just over 15 million units last year, compared with 20.5 million the prior year.
Sales of its DS series of handheld consoles also took a nosedive. In the fiscal year just ended, DS sales dropped 22% to 21.1 million units, including 3.6 million units of Nintendo's new 3DS console, which was introduced toward the end of March. The year before, Nintendo sold 27.1 million DS consoles.
The waning popularity of the Wii has sparked rumors several weeks ago that Nintendo would introduce a successor console. The company on Monday issued a terse statement on its investor relations site confirming the rumors, saying it will show a playable model of its new console at the industry's E3 conference in Los Angeles in June and will start selling the device next year.
Nintendo declined to reveal details of its new console, code named "Project Café." But game analysts are expecting that the device will sport more powerful processors, making up for one of the key weaknesses of the Wii –- its lack of high-definition graphics, which has made Wii games appear old-fashioned compared to its beefier rivals, Sony Corp.’s PlayStation 3 and Microsoft Corp.’s Xbox 360.
In addition, similar to the PS3 and Xbox 360, Nintendo's new console is expected to have a bigger emphasis on online games than the Wii, said Edward Williams, analyst with BMO Capital Markets.
"The key will be figuring out what Nintendo’s vision for the next 5 years will be and how they plan to bridge a physical world of discs with a digital world" in which games are sold online, either as a streaming service or as downloads, Williams said.
-- Alex Pham
Photo: The Nintendo Wii console will be getting an update. (Nintendo)
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Instead of introducing a new console, Nintendo should focus on making more desirable and affordable games to drive sales. They need to be able to offer something everyone else doesn't have. The Wii is a great gaming system because it is so intuitive. They should run with that.
Posted by: Melinda | April 25, 2011 at 11:17 AM
The problem is that in the last few years, people have been making the switch to HD TV's. The Wii's limitations are a lot more noticable now. This is a smart move.
Posted by: Jay Dyer | April 25, 2011 at 02:13 PM
I only own a Wii for the virtual console to download and play retro games. I hope that they will continue to support this function of the Wii after the new device comes out. I really don't want to have to buy an entirely new machine just to do the same thing. I would like if they expanded the virtual consoles library of games and made the multiplayer games actually multiplayer connecting to other Wii systems.
Posted by: gamegenie | April 25, 2011 at 11:06 PM
The WII is great fun for adults who enjoy more than killing Nazis and zombies. Is the new machine backwardly compatible?
Posted by: Olden Atwoody | April 25, 2011 at 11:25 PM
The problem with the Wii is the same problem I had with the system when it first came out. It lacked the picture quality other consoles had and it was also lacking in the processor power the competitors have. Nintendo needs to make a system for everyone not just the 10 and under age. The Wii controller was a great addition to the gaming universe, sadly the system wasn't.
Posted by: Saul | April 25, 2011 at 11:30 PM
Nintendo needs to broaden their scope of what games they make. Hopefully they can touch on that with this new system.
Posted by: Scott | April 26, 2011 at 08:48 AM
the gravy train is losing steam.
Guess the market is saturated with over priced Wii's.
Posted by: mike02 | April 26, 2011 at 08:54 AM