This morning, Nintendo of Japan showed off its financial earnings release for the six months ended on September 30, 2016. The company's sales were at 136 billion yen ($1.3 billion), down 33 percent from last year. Operating income was also way down with a 30.8 billion yen ($296 million) loss, but Nintendo squeaked out with a profit due to the sale of the Seattle Mariners for 62.7 billion ($600 million).
In the win column, 3DS hardware sales were up 19 percent, ending at 2.71 million units for the six-month period. Nintendo partially attributes this to the success of Pokemon Go, which led to increased sales of older Pokemon titles. Nintendo also managed to sell 3.8 million Amiibo figures, despite a lack of any titles supporting them during the period. Unfortunately, those wins couldn't counteract the lack of major releases other than Kirby: Planet Robobot for 3DS and the continued strength of the Japanese yen.
Regardless of the current report, things are definitely looking up for Nintendo. Pokemon Sun and Moon are coming to 3DS in November, alongside the NES Classic Edition mini-console. In December, not only is Nintendo bringing Super Mario Maker to 3DS, it's also releasing Super Mario Run on Apple's iOS. And before the fiscal year ends on March 31, 2017, Nintendo will be releasing the newly-announced Nintendo Switch.
According to the Wall Street Journal's Takashi Mochizuki, Nintendo president Tatsumi Kimishima said that the company expects to ship 2 million Nintendo Switch units by the end of the fiscal year. This points to a worldwide release of the platform. Within its first two months, the Nintendo Wii U had shipped 3.06 million units, having launched in all major territories. Nintendo can't expect to cross 2 million in a single region within a month.
Whether those shipment numbers are strong or weak depends on when Nintendo is aiming to sell the Switch. If it launches in early March, those are poor numbers; if it launches at the end of March, they're relatively strong. Either way, Nintendo seems to be playing it safe with its forecast.
Kimishima reiterated that Nintendo won't be selling the Switch at a loss, but said the company is listening to consumers about the price. Pricing is key, especially given that the market leader is selling its PlayStation 4 Slim console at $299.
Nintendo's president also restated that the company would continue to support the 3DS, with the Switch not being a replacement for the portable. This is what was said about the DS in relation to the Game Boy lineup back in 2004. When it was announced, Nintendo said the Nintendo DS was its "third pillar" and not intended to replace the Game Boy. When the system succeeded, Nintendo quietly killed the Game Boy line. I'd expect the same here: if the Switch succeeds, I doubt you'll see a 3DS follow-up. If it doesn't, you might.
There's a light at the end of Nintendo's tunnel, we just have to see if the Switch has the legs that Nintendo is looking for from its flagship system.