Posted by: zsaberlink | February 11, 2011

Analysis of Nintendo’s Q3 FY2011 Financial Report – Million-Seller Games, Etc.

Introduction

With sites such as vgchartz and long discussions on forums like NeoGAF about video game sales estimates, there is clearly an audience interested in how well particular games sell. This is not surprising, as a game’s success or failure often determines a company’s decisions about that franchise or genre in the future. In this post I’m going to focus on Nintendo and their hardware and software sales. In addition, I will talk about the games which sold over a million units in these past months (April to December 2010), and Nintendo’s list of upcoming games. All charts and graphs in this post are derived from numbers in Nintendo’s financial report and supplementary report at: http://www.nintendo.co.jp/ir/pdf/2011/110128e.pdf.

First, I’d like to briefly describe what these investors’ reports are, in order to help establish where this information is coming from. Companies around the world periodically release financial reports which describe how well a company performed during a particular time period. This is usually meant to help shareholders (people who own stocks/parts of a company) decide whether they wish to keep holding shares in a company.

Nintendo of Japan periodically releases financial reports for this exact reason, which contains useful information about the company’s earnings and other finances. In addition, Nintendo also often releases a pdf of supplemental information along with its reports, such as this one: http://www.nintendo.co.jp/ir/pdf/2011/110128e.pdf.

These pdfs contain information about games that sold over a million copies, overall hardware and software sales (DS and Wii at the moment), and games they plan to release in the future. Because these numbers come directly from Nintendo, these are the most accurate sales numbers out there (far more accurate than vgchartz and NPD), since Nintendo has the need and the means to collect this information. I will talk about and analyze these three topics for the last financial period (April through December 2010) in this post.

DS/Wii Hardware and Software Sales Discussion

DS HW Sales (in millions) Q1 Q2 Q3 Total
Japan .45m .69m 1.05m 2.19m
The Americas 1.26m 1.27m 5.00m 7.53m
Other 1.44m 1.57m 2.96m 5.67m

Figure 1a: DS Hardware Sales from April to December 2010

Wii HW Sales (in millions) Q1 Q2 Q3 Total
Japan .19m .26m 0.66m 1.11m
The Americas 1.80m 0.71m 4.62m 7.13m
Other 1.05m 0.96m 3.47m 5.48m

Figure 1b: Wii Hardware Sales from April to December 2010

First, we have the Nintendo DS, which sold 15.39 million hardware units so far in this fiscal year with over half the sales occurring in Q3, which contains the winter holiday season in many nations. The Wii sold quite similarly throughout the world, selling 13.72 million units during this time period, and also saw more sales in the winter holiday season (Q3). Seeing as both these sales are the two best selling game consoles on the market this year, I’m sure Nintendo is rather content with the sales the past three quarters, especially considering the 3DS is soon to be released. Software sales are also rather strong for both consoles (Wii: 150.53 million, DS: 98.99 million), but I’ll keep commentary on this short so we can continue on to Nintendo games that sold over a  million copies.

Nintendo Games that Sold Over a Million Copies in Apr-Dec 2010

Wii Game Title Sales during Period (in
millions)
Lifetime Sales (in millions)
Wii Sports 12.19 75.66
Wii Sports Resort 10.21 26.35
New Super Mario Bros. Wii 6.58 21.28
Super Mario Galaxy 2 6.15 6.15
Wii Fit Plus 5.09 17.74
Wii Party 5.07 5.07
Donkey Kong Country Returns 4.21 4.21
Mario Kart Wii 3.95 26.50
Super Mario All-Stars Limited
Edition
1.95 1.95
Kirby’s Epic Yarn 1.38 1.38

Figure 2: Nintendo Wii’s 1st party games that sold over a million copies

Ten 1st party games sold over 1 million copies on the Wii between April and December of 2010, which is quite impressive. The usual culprits such as Wii Sports, Wii Sports Resort, New Super Mario Bros. Wii, Wii Fit Plus, and Mario Kart Wii continue to sell well, but 5 new games released this year sold over a million.

I first have to give my congratulations to Retro Studios and Nintendo on Donkey Kong Country Returns. This game sold 4.21 million copies in the 8 month period, which means the game is on its way to competing and potentially beating the sales of each of the games in the original Super Nintendo trilogy. I’m happy to see that this game also fared relatively well in Japan, where it sold over 750,000 copies. Nintendo often struggles to get franchises apart from Mario, Pokemon, and their new “Wii” franchise to sell in Japan, but Donkey Kong Country Returns could prove fairly successful there.

We also have Super Mario Galaxy 2, which has sold 6.15 million copies worldwide. This game is also selling fairly well compared to its predecessor, and has even broken 1 million units sold in Japan, which is quite a feat for a 3D platformer in the country (it took much longer for the original Galaxy to reach that sales milestone in Japan).

The last three titles, Wii Party, Super Mario All-Stars, and Kirby’s Epic Yarn all seemed to quietly sell 5.07 million, 1.95 million, and 1.38 million respectively. Wii Party continues the success of the Wii franchise with its strong 1st year sales. On the other hand, only a limited number of copies of Super Mario All-Stars were made, so a potential reprint could definitely boost Mario All-Star’s sales. Finally we have Kirby’s Epic Yarn, an imaginative Kirby adventure made by the development studio Good-Feel. This game did fairly well sales-wise, although Kirby’s last game, Kirby’s Squeak Squad on the DS, did sell more in a similar time period when it was first released (1.60m in 2007). However, considering Kirby games have generally been more prevalent and popular on the handhelds, the comparison of the sales of those two games isn’t entirely fair. In addition, the game has yet to be released in Europe, so Kirby’s Epic Yarn could do better than Kirby Squeak Squad.

One notable first party Wii game that’s missing was Metroid: Other M. By these numbers it seems like that game unfortunately failed to break a million sales.

DS Game Title Sales during Period (in
millions)
Lifetime Sales (in millions)
Pokemon Black/White Version * 5.32 5.32
New Super Mario Bros. 3.73 26.32
Pokemon HeartGold/SoulSilver 3.32 11.72
Mario Kart DS 2.80 20.70
Professor Layton and the
Unwound Future **
1.87 1.87
Art Academy 1.52 1.52
Mario vs. Donkey Kong:
Mini-Land Mayhem!
1.15 1.15
Dragon Quest IX ** 1.02 1.02

Figure 3: Nintendo DS’s 1st party million sellers

Even in the final year of the Nintendo DS, the portable had 8 1st party titles sell over a million copies. Some notes are that Pokemon Black and White has only been released in Japan, thus the sales are almost entirely from Japan at the moment. Also, Professor Layton and Dragon Quest IX were both published by Nintendo outside of Japan, so these sales numbers only represent the “overseas” sales (Americas, Europe, etc.).

While the tradition Mario and Pokemon titles sold well as usual, it’s nice to see the two Nintendo-published third party games sold fairly well outside of Japan. Japan is crazy about both Professor Layton and Dragon Quest, but it has taken some effort for these series to catch on outside of their homeland. Professor Layton has had a growing fanbase in Europe due to its European setting. Professor Layton and the Unwound Future (the third entry in the series) has sold 1.87 million copies within 3-4 months of its release, which is a bit less than the sales of its predecessor, Professor Layton and the Diabolical Box (which had 2.23 million in the same period last year).

Both Professor Layton and Dragon Quest are partly made by the growing company Level-5. Recently, it was shown that about 5% of the software sales in Japan come from developer Level-5, who does the animation and graphics for Dragon Quest games and created the Professor Layton and Inazuma Eleven series on the DS. Due to its growing popularity outside of Japan, Level-5 actually plans to have offices outside of Japan, which would allow them to publish their own games internationally as well.

Upcoming Games

In addition to the sales numbers, Nintendo lists both the games it did release in the reporting period, as well as the games it plans to release in the future. The games listed for release this year include Legend of Zelda: Skyward Sword, Pokemon Black/White, Line Attack Heroes in the Americas, and Kirby’s Epic Yarn in Europe. One game that’s happily still included in the release list for the Americas is Monado: Beginning of the World (also known as Xenoblade in Japan). Since this Japanese RPG did decently well in Japan, we can continue to hope that Nintendo of America will localize this game. Last Story still isn’t listed on the release schedule outside of Japan, but that may be because it was too early to make that decision since it had not been released in Japan.

Conclusion

Nintendo provides quite a bit of accurate and interesting information in its financial reports, and I hope my summary and analysis of January 28th, 2011’s financial report’s supplementary information will generate more awareness about the information Nintendo provides about its own game sales.  I intend to do some analysis on previously released reports (there are reports at least back until 2006), and reports that will be released in the future, so be sure to check in then for more analysis of Nintendo’s financial reports.

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