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Nintendo may have just reported another quarter where it lost money, but this isn’t stopping it from once again predicting that it will make a profit for the year.
Nintendo had another bad quarter, but even with that continuing decline, it predicts that it will generate a net profit of $195 million for the year. The company is also advising investors that it will ship 3.6 million Wii Us after only selling in around 500,000 consoles in the the first quarter. To accomplish these things, the Japanese publisher will need Super Smash Bros. and Hyrule Warriors to do at least as well as Mario Kart 8 is doing. Earlier today, the company responsible for Mario, Zelda, and the Wii U reported a $97 million net loss for the first quarter of its fiscal 2015. That’s despite Mario Kart 8 roaring to 2.8 million copies sold in just around a month during that period. The mascot racer was the Wii U’s and Nintendo’s best hope to earn a profit in the first half of the year, but even its strong sales couldn’t pull Nintendo out of its nosedive even if it did slightly beat Wall Street’s earnings expectations.
Mario Kart 8 is actually performing very well. Its 2.8 million is especially impressive when you consider it only had an audience of 6.68 million Wii U owners. The problem is that the racer hasn’t led to a mass adoption of Wii U by consumers. The system performed much better than it did in Q1 of fiscal 2014, when it only sold 160,000, but it’s not enough to turn a profit. And if that game, with its mass-audience appeal, can’t convince millions to pick up a Wii U, then Nintendo may struggle to reach its goal.
Wedbush Securities analyst Michael Pachter doesn’t see it that way. He believes that Nintendo’s Wii U guidance is achievable.
“Nintendo appears to be on track to deliver growth, with Q1 hardware sales of 500,000 units up from 160,000 units a year ago, and software sales of 4.39 million units up from 1.03 million units,” he wrote in a note to investors. “The growth was driven in large part by new release Mario Kart 8, and we expect Super Smash Bros. to have an even greater impact later this year.”
Smash Bros. does look like it will attract a sizable and dedicated audience. The four-player fighter drew an audience of thousands for an invitational competition at the Nokia Theater in Los Angeles during the Electronic Entertainment Expo in June, and the company’s multiple kiosks for the game had some of the biggest crowds at that tradeshow. But Smash Bros. has to do well because it is one of the only major games Nintendo has planned for this holiday season.
The company will also release the Zelda-themed Hyrule Warriors, which could also do well but probably won’t sell like a “real” Zelda adventure. The game combines Zelda characters and settings with the Koei Tecmo Dynasty Warriors games, which have players taking on hundreds of enemies in over-the-top battles.
The only other major Wii U exclusive that was to debut this year is Captain Toad’s Treasure Tracker, which is a puzzler based on some special levels from Super Mario 3D World, but that game just got delayed to 2015 in Europe.
That puts a lot of the burden on just a small handful of games, and if one slips or debuts to less-than-stellar reviews, Nintendo may go on to experience a few more disappointing quarters.