Nintendo claims hardware comeback despite 74% profits dip

Nintendo president Satoru Iwata has defended the company's performance in the wake of a 74% year-on-year profits slump.

Observing that following a difficult nine months of hardware sales, he told investors that "Few people in the industry were able to anticipate that Wii would regain its momentum at the end of the year."

In Nintendo's home nation of Japan, "In the latter half of December, Wii sold twice as much as PS3". The US had seen similar resurgence, although sales had not returned to 2009's record-breaking levels: "Wii sold more than 2,350,000 units of hardware in December 2010, which was better than December 2008, when Wii was selling very well.

"As a result, Wii was able to establish another record in the U.S. home console market by selling more than seven million units in the U.S. in three consecutive years."

In Europe during October 2010, "Wii was in the lowest position among all the consoles, so when I told you that I believed Wii would make a comeback in the year-end sales season, it might have sounded like nothing but a mere dream.

"Wii sales rose sharply to the top in the 43rd week, which is when we released the red Wii hardware. The sales pace picked up even more speed during the year-end sales season, and Wii went back to holding the largest market share.

"I think that few people could have expected that in the peak week of the year-end sales season, Wii hardware would be selling almost twice that of other consoles." Across Europe's major territories during week 50 of last year, the Wii sold around 450,000 units, compared to around 300,000 for PS3 and 250,000 for 360.

The red Wii was repeatedly mentioned as contributing to the year-end resurgence. However, Iwata felt that the entire market was suffering. "Overall the home console market in 2010 could not create the excitement that the industry had experienced in the 2009 year-end sales season."

The handheld DS range had performed well in Japan, primarily due to combined sales of Pokemon Black & White becoming the highest-selling game of the year there, but Iwata admitted things were not so rosy in other territories.

"While the home console software market has been able to maintain a similar market size over the past two years, the handheld software failed to do the same in Europe. It's been said that the illegal copies of software have had significant impact in Europe.

"In addition, we analyze that another reason for the declining market size is the low active-use ratio of Nintendo DS hardware for the lack of new software titles selling very well.

"Although Nintendo DS has kept its high market share, we are far from satisfied with the current handheld software market." The 3DS would be part of "various efforts" to "revive" the handheld market.

For software, Iwata singled out certain titles as major contributors. Wii Party was revealed to have sold more than five million units worldwide, though as European sales were so far higher than in the US, "We believe that this software still has potential in the U.S., so we are planning to further promote it."

DS drawing title Art Academy was revealed to have sold more than 1.5 million units worldwide, while further sales data held that combined lifetime sales of Wii Sports and Wii Sports Resort had hit 102 million units. Around 22 million of these occurred during the last nine months of 2010.

The strongest worldwide performer of the year for Nintendo was Super Mario Galaxy 2, which shifted 6.15 million units across 2010. In total, 18 Nintendo titles passed one million worldwide sales between April and December last year.