Nintendo Needs NX: Sales and Profit Way Down in Q1

Today, Nintendo released its financial report for the first quarter of fiscal year 2016, ended on June 30, 2016. The company posted its first loss in a while and the biggest first quarter loss since 2011. The numbers were down across the board: Sales dropped 31.3 percent, coming in at 61.9 billion yen ($602.9 million), versus 90.2 billion yen ($877.8 million) during the same period last year. Last year, Nintendo brought in a profit, but for this quarter, the company recorded a loss of 24.5 billion yen ($238.7 million).

Yesterday's rumor of the Nintendo NX's potential form factor seems to have been a good thing for the company, giving it a hopeful face for the future ahead of these numbers.

So what happened? First up, Wii U sales were halved year-over-year, coming in at 220,000 systems sold. Software sales were slightly up, landing at 4.68 million units. The company's major releases during the quarter included Star Fox Zero and Mario & Sonic at the Rio 2016 Olympic Games, and sales relied on the continued success of Splatoon and Super Mario Maker.

For the 3DS, hardware was down slightly at 940,000 units, while software was up slightly at 8.47 million units. Major releases for the period included Kirby: Planet Robobot, Bravely Second: End Layer, and the European release of Fire Emblem Fates.

The lack of tentpole releases clearly hurt the company. As Nintendo itself noted in its supplementary information: "There are no million-seller titles during the three months ended on June 30, 2016."

This lack of major games also depressed the sales of Amiibo. Figure-type sales were at 1.70 million units, which is less than half of the 4.2 million sold in the preceding quarter. Card-type Amiibo sold 1.3 million units, down a whopping 7.4 million versus the last quarter. Nintendo itself noticed that drop was "mainly due to a lack of new titles that are compatible with amiibo".

The release of the company's first smartphone title, Miitomo, did push sales in the "Smart Devices and IP-related income" section up a bit. Sales came to 1.6 billion yen ($16 million), up from 932 million yen ($9 million) year-over-year.

It was a poor quarter, so Nintendo is looking forward. It's planning the release of Pokemon Sun and Moon and Mario Party Star Rush for Nintendo 3DS. More importantly, the company remains committed to the March 2017 release of the Nintendo NX. Prior to that system's release, Nintendo will be launching other hardware: the classic Mini NES. Finally, Nintendo's smartphone plans will continue with Animal Crossing and Fire Emblem titles, with the company using these apps to "maximize the population that has access to Nintendo IP."