Nintendo has released its financial results for the nine-month period ending December 2016, with sales totaling $2.7 billion—a 27 percent decline from 2015. The company’s financial successes have been a roller coaster ride—from selling almost 102 million units of the Wii to just under 14 million units of the Wii U. While sales for the 3DS were up 10 percent, Nintendo needs a big win with its new Switch console.
Pokémon GO might have thrust Nintendo back into the spotlight, but the company doesn’t see all that profit, having only part ownership in the Pokémon Company. Regardless, the app’s popularity led to increased sales of software in the Pokémon franchise and drove Nintendo 3DS family hardware sales growth. Nintendo sold 6.45 million 3DS units worldwide during the quarter (10 percent increase on a year-on-year), while Nintendo 3DS software sales were 46.78 million units (20 percent increase on a year-on-year).
And then there’s Super Mario Run. Nintendo stated in a briefing that Super Mario Run has been downloaded 78 million times on iOS, but only around five percent of players are buying the $10 full version.
“Despite a wide release of Super Mario Run in collaboration with Apple, resulting in 78 million downloads of the free version, the game has only sold only four million copies,” observed SuperData CEO, Joost van Druenen. “This is largely the result of the high price point ($10) in the predominantly free-to-play app store on iOS.”
During Monday’s financial report, Nintendo president, Tatsumi Kimishima announced that the company plans to ramp up Switch production thanks to strong global pre-orders. Initially, Nintendo announced that two million units would be shipped worldwide during the first 30 days of the Switch’s lifespan. However, pre-orders went incredibly fast in North America and Japan, going so far as to overload and crash the official website. “You can tell customers have huge expectations based on how Switch reservations are doing,” said Kimishima. “We want to increase production as much as we can.”
Pre-orders may be a good sign, but experts still remain cautious about certain retail choices. “The news that the Nintendo Switch will launch without any bundled games or even demos is likely to have a negative effect on initial sales,” van Druenen added. “For the current console generation (PlayStation 4, Xbox One), bundling has been an important driver of consumer adoption and a key strategy in the face of weakening title sales at retail.”