Slowing Hardware Sales for Nintendo, Sony

Yes, the 3DS price cut announced today is a big deal but for more reasons than just saving a few bucks as you feed your gaming addiction. Today was also when Nintendo (and Sony) released their quarterly financial reports, and things aren’t looking so great.

Let’s start with Nintendo. If you recall, the Wii was (and still is) a bona fide hit. It has sold over over 87 million units worldwide since its late 2006 release and has raked in a nigh incalculable amount of money on software sales, and that’s not to mention the huge buckets of cash their handheld devices have brought in as well.

Cut to the present and even just casually perusing the earnings release from Nintendo this morning, you can tell things have taken a turn for the worse. Since last year, DS sales have gone down over 50% from 3.1 million to 1.4 million units for this quarter. Nearly the same numbers were posted for the Wii, too, as it went from 3 million to 1.5 million, and with the 3DS only selling 710,000 units worldwide, not a lot is looking up for the Japanese game company.

In fact, they revised their profit forecast from $1.41 billion to a relatively meager $257 million. Nintendo cites “trends of stronger-than-expected yen appreciation and sales performance, the decided price reduction of the Nintendo 3DS hardware, and the sales outlook for the holiday season” as to why, but as evidenced by their waning stock prices, not even investors are buying their story.

As for Sony, it’s both good and bad news. Between April and June last year, Sony had sold 2.4 million PS3s, a remarkably better looking figure compared to this year’s 1.8 million. Some how, though, despite (or perhaps because of) the PS Vita having been announced, PSP sales actually went up from 1.2 million to 1.8 million.

Now here’s the mind-boggling (and good) part: PlayStation 2 sales are still lingering on at 1.4 million, an almost negligible decrease from the previous year’s 1.6 million considering the console’s age. I understand that the PS2 has some of the greatest games ever released and the PS3 no longer has backwards compatibility, but still. What.

Unfortunately, not even an 11-year-old console can save dwindling sales, which are down 10% for the quarter from last year, dropping to $18.46 million. However, Sony’s earnings reports are a bit more complex since they encompass the entire company, subsidiaries, separate division, and all. This includes Sony Ericsson, Sony Pictures, Qriocity, and everything else, and despite the report splitting it all up into segments, parsing it for strictly video game-related cause-and-effect analysis isn’t as cut and dry as it is with Nintendo. The report also brings into account the earthquake and tsunami from March and the network attack from April, which complicates things a bit further.

None of this, I guess, is all that surprising. There’s market saturation to take into account and the golden goose (read: Wii) will always eventually run dry, but try to remember that Nintendo is still going to aim for and probably hit over a quarter of a billion dollars and Sony has a bunch of other non-video game things to deal with. Jumping to conclusions like “companies are going under” or “games are failing” is mostly ludicrous at this point.

Regardless, it’s a significant trend and is somewhat telling of the fact that the video game industry is in a bit of a slump. Is it perhaps because this has been an exceptionally slow quarter for video games? Maybe it’s because this holiday season is particularly rife with AAA titles that are the industry equivalent of guaranteed Oscar-contenders? Who knows. I personally blame Mr. Caffeine.

via Nintendo and Sony via Joystiq and Kotaku (2)

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