fy-2011
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Nintendo cuts profit forecast by 82%
If it wasn't clear already: the 3DS has not been a home run for Nintendo. In its revised earnings forecast for the fiscal year ending March 2012, the company dropped its estimated profit to ¥20 billion ($257M), an 82 percent drop from the ¥110 billion ($1.41B) it expected. The company stated the modification had been done to reflect "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." A similar cut in Japan (effective August 11) will take the system from ¥25,000 (around $317) to ¥15,000 ($190). The steep profit reduction isn't Nintendo's only glaring concern, as the company couldn't regain investor confidence after announcing the Wii U at E3 and its stock currently sits at five-year lows. For the first quarter ending June 30, Nintendo saw its net sales cut by half from the same period last year to ¥93 billion ($1.2B), causing a ¥38 billion ($489M) loss in operating income, with a net loss for the quarter staying relatively even to last year's at ¥26 billion ($334M).
1.7m Xbox 360s shipped last quarter, Xbox biz grows 29%
Microsoft released its Q4 earnings for fiscal year 2011 today. Being a video game site, we're going to focus on the company's Entertainment & Devices Division responsible for, amongst other things, the Xbox 360 (a device primarily built for entertainment). In the three-month period ended June 30th, the Big M shipped 1.7 million Xbox 360 units, compared to a measly 1.5 million the previous year. But increased console sales don't account for all of the Xbox 360 platform's 29% revenue growth; Microsoft also has "higher Xbox Live revenue" to thank. For the year, Xbox 360 platform revenue grew $2.7 billion or 48%, thanks to "increased volumes of Xbox 360 consoles, sales of Kinect sensors, and higher Xbox Live revenue." Microsoft shipped 13.7 million consoles during fiscal '11 versus 10.3 million in fiscal '10. That success has propelled revenue growth at the entire Entertainment & Devices Division 30% for Q4 and 45% for the year (nice going, Windows Phone 7). Revenues for all of Microsoft were up 8% for the period, year-over-year, with the company singling out "the Xbox 360 entertainment platform" as one of the primary catalysts for growth. With the top-selling home console in North America for 12 of the last 13 months, according to NPD data, and a runaway hit in Kinect, it's easy to see why Xbox 360 is doing so well for Microsoft.
Microsoft Q4 FY11: revenue, earnings, and profits all up, beating expectations
The news wasn't so good for Nokia this morning, but its new bedmate is in much, much better shape. Microsoft's Q4 earnings for the 2011 fiscal year have been posted, showing revenue of $17.37 billion -- up eight percent over the same period last year, and besting the $16.43 billion record Q3. That drove $5.87 billion in net income, which is a whopping 30 percent climb over the year previous. Looking back over the full year, revenue broke another record, clocking in at $69.94 billion, 12 percent higher than the year before. Why all the good news? Well, the Entertainment & Devices Division saw a 30 percent revenue jump in the quarter, 45 percent over the year, as the Xbox 360 and Kinect continue to sell like gangbusters. Bing and Online Services also had good news, 17 percent revenue growth in the quarter thanks to the plucky search engine gaining ever more ground against the competition. But, not everything is rosy, with the Windows-related revenue staying flat -- down one percent this quarter, two percent over the year. Windows 8 will surely turn things around on that front, though, right?
Take-Two takes 49% more in revenue in fiscal 2011
Take-Two let out a hearty (but metaphorical) "Yee-haw" today, reporting a 49 percent rise in net revenue year-over-year for the fiscal year that ended March 31. Thanks to hits like Red Dead Redemption (8.5 million units shipped, the company announced today!) and its Undead Nightmare expansion, and the five-million-selling NBA 2K11, Take-Two brought in $1.14 billion in net revenue. Its net income rose to $48.5 million for the fiscal year, a welcome change from the previous year's $123 million loss. With that kind of money, Take-Two should be able to survive the losses from when Duke Nukem Forever doesn't actually come out. (Kidding, mostly.) The top earners for the fourth quarter included, in Take-Two's estimation, "NBA 2K11, Top Spin 4, Major League Baseball 2K11, Grand Theft Auto IV: Complete and Red Dead Redemption: Undead Nightmare (standalone disc)." In addition, digitally distributed content accounted for 15 percent of net revenue in the quarter, driven by Red Dead Redemption, Borderlands, Grand Theft Auto and Civilization DLC.
PSN breach and restoration to cost $171M, Sony estimates
In the lead-up to its fiscal year 2010 earnings report this Thursday, Sony today released a revised forecast -- forewarning a $3.2 billion loss (yowzah!) -- for the twelve months ending March 31, 2011. Having occurred in late April, the PlayStation Network attack and subsequent data theft and outage fall outside of that period, but the company nonetheless addressed "the impact" of the event during an investors call today, "since there have been so many media inquiries about this incident." "As of today," said Sony, according to its call script, "our currently known associated costs for the fiscal year ending March 2012 are estimated to be approximately 14 billion yen on the consolidated operating income level." That's roughly $171 million -- a "reasonable assumption," says Sony -- that the company expects to spend throughout the current fiscal year on its "personal information theft protection program," in addition to "welcome back programs," customer support, network security "enhancements" and legal costs. Sony noted that revenue loss from the outage and recovery, which also spans its Qriocity and Sony Online Entertainment services, had been factored into the cost, as well. "So far, we have not received any confirmed reports of customer identity theft issues, nor confirmed any misuse of credit cards from the cyber-attack," the company added. "Those are key variables, and if that changes, the costs could change." And what about the class action suits? Sony qualifies them as "all at a preliminary stage, so we are not able to include the possible outcome of any of them in our results forecast for the fiscal year ending March 2012 at this moment."
NCsoft profits decline, limited marketing blamed
MMORPG publisher NCSoft has reported a year-over-year decline in both revenue and profit during the first quarter of 2011. The company's revenues fell 7 percent from the same period a year ago to 155.4 billion Korean Won (about $143 million), despite increased sales from Lineage 2. Profits showed an even sharper decline, dropping 30 percent to 40.8 billion KRW ($37.5 million). The company chalked up the losses to "soft sales promotions" of its other two key games, the original Lineage and Aion -- or, as we like to call them, "the one with all the castles" and "the one with all the angels." That's ... about all we know about the two games. You know, ahem, because of their limited marketing budgets.
Sega earnings suffer from Yakuza delay, 'sluggish' Western game sales
Sega Sammy's consumer game division -- a.k.a. Sega games -- brought in ¥89.55 billion ($1.1 billion) in sales over the last fiscal year (ending March 31), down 26.5 percent from the previous year. Operating income declined even more sharply to ¥2 billion ($24.8 million), down 68.9 percent. While the previous fiscal year saw major success from Mario & Sonic at the Olympic Winter Games, this latest 2010–11 fiscal year was an off-year for the two Olympians, who were in training for their next competition. Sonic's less sporting pastime, Sonic Colors, was the bestseller in Sega's lineup, moving 2.18 million copies worldwide. It was followed by ... Iron Man 2, which sold 1.54 million. Vanquish, which everyone without Stark Industries stock would agree is the better robot-suit game, only managed about half of that achievement at 830,000 units sold. Shogun 2: Total War and Phantasy Star Portable 2 Infinity (which only came out in Japan) rounded out Sega's "major" lineup with 600,000 and 370,000 copies sold, respectively. Sega said that sales were slow in North America and Europe due to "the adverse market condition," noting "sluggish personal consumption" in those regions (which ... didn't seem to be an issue for everybody). Additionally, Sega's big Japanese release, Yakuza: Of the End, was delayed out of the fiscal year as a result of the Tohoku earthquake in March, further reducing the company's bottom line. Overall, however, Sega Sammy about doubled its net profits from the previous year to ¥41.51 billion (roughly $513 million) on the strength of its pachislot and pachinko business.
Konami's games division shows small drop in fiscal 2010, still pleased with game sales
Konami as a whole brought in ¥20.8 billion ($257 million) in operating income, and net revenues of ¥258 billion ($3.19 billion), in the last fiscal year, essentially keeping pace with fiscal year 2010. But Konami Digital Entertainment, the company's video game division, saw a small year-over-year decline, with operating income dropping from ¥21.5 billion to ¥17 billion. Despite the difference, Konami still spoke positively of its performance in fiscal 2010, citing sales of Metal Gear Solid: Peace Walker and various Pro Evolution Soccer releases as having "progressed favorably," "healthy sales" of Castlevania: Lords of Shadow, and "steady" increases in sales of mobile games in Japan. And though it'll never leave Japan, the "girlfriend simulator" series Love Plus contributed as well, with the latest DS release Love Plus Plus having "received a highly positive response among Japanese consumers." We hope that isn't a euphemism.
Square Enix braces investors for 'extraordinary losses' in last fiscal year
On the eve of its quarterly presentation to investors and analysts, Square Enix today sent out a "revised" (uh-oh) forecast for the financial results of the last fiscal year, which ended March 31, 2011. Stakeholders should bring their ponchos -- they're in for stormy weather. In February, with nine months in the books, the publisher was confident it could hold onto its threadbare profits, forecasting a meager ¥1 billion ($12 million and change) in net income at the close of the fiscal year. While the unforeseen and devastating Great East Japan Earthquake in March knocked out more than half of that forecast income -- costing Square Enix roughly ¥0.6 billion in amusement facility closures and repairs -- other factors contributed more significantly to the company's now bleak outlook. So how bad is it? Square Enix currently anticipates a ¥12 billion (nearly $150 million) net loss for the 12-month period, a negative 226 percent change from the previous fiscal year (which brought in ¥9.509 billion in income). Further, accounting for additional subtractions from the balance sheet, the company is bracing investors for "total extraordinary losses of approximately ¥16.0 billion during the fiscal year." If there's a silver lining, it's in the publisher "introducing a tightened selection standard regarding title lineup" -- which cost Square Enix about ¥4.5 billion in the short term due to project cancellations, including a Highlander game and Gun Loco. But, ideally, this quality control will "strengthen" the company's critical video game segment in the long run, and perhaps restore Square Enix to its former glory.
Capcom estimates sales for Operation Raccoon City, SF x Tekken, and other upcoming games
In a document about its "Strategies and Plans" for the fiscal year ending March 31, 2012, Capcom provided estimates for how many copies of its upcoming games it expects to sell. Or "plans" to sell, although those plans aren't entirely up to Capcom. It expects the biggest seller of the fiscal year to be Resident Evil: Operation Raccoon City, which it estimates will sell 2.5 million units. Following that is Street Fighter x Tekken at 2 million -- a game whose presence suggests a release before next April, even though the date is still listed as "TBA." The open-world action game Dragon's Dogma is expected to sell around a million and a half, the first step in an initiative mentioned elsewhere in the document: to "develop Dragon's Dogma and Asura's Wrath into new franchises." And Dead Rising 2: Off the Record, Capcom's modern-day answer to Final Fight Guy, is expected to sell around 800,000 worldwide.
Namco Bandai climbs out of the red with pair of million-sellers
For the fiscal year ending March 31, 2011, Namco Bandai's "Content" division -- which includes both home-console and arcade games, in addition to music and video products -- increased sales just enough to post a modest operating income of ¥3.09 billion ($38.5 million). In turn, the company turned around from the previous fiscal year's net loss to scrounge up ¥3.78 billion ($46.9 million) in profit. The publisher put out 88 games (including individual iterations of multiplatform titles) across six systems, selling roughly 20.9 million software units in the 12-month period. Its efforts were focused primarily on handheld releases, with 30 games on DS -- plus three more for the 3DS launch -- and 29 for PSP. The company's two bestselling titles during the fiscal year, however, were for home consoles: 2009's still-kicking Tekken 6 accounted for 1.15 million unit sales on PS3 and Xbox 360 in the US alone, and Naruto: Ultimate Ninja Storm 2 sold 1.1M units worldwide on those same consoles, according to the company's financial highlights document [PDF]. While Naruto performed above initial expectations, Enslaved failed to muster numbers in line with even the revised sales forecast reset by Namco Bandai in November. Ninja Theory's action-adventure had to settle for 730,000 units sold across PS3 and 360, falling short of the hoped-for 800K mark. As for Splatterhouse and Majin, the publisher did not report their individual sales, as both titles' performances seemingly fell below 400K units (Namco Bandai's cutoff line for "Main Game Titles," as they appear in the financial highlights report). For the current fiscal year, which began April 1, Namco Bandai forecasts continued gains resulting in ¥8 billion in profit. The publisher has plans to release 90 games during the period, including 26 titles bound for PS3. Props to anyone that can name three of them! (No googling.)
Activision Blizzard banks $503 million in first quarter profits
Beneath the Southern California headquarters of Activision Blizzard there lies a zeppelin-sized vault, near-bursting with piles of gold and riches -- or at least that's how we imagine it. The company today reported its first quarter 2011 earnings, reaping a record $1.4 billion in sales revenue, an increase of $100 million over the same period last year. Net income came to $503 million, up from $381 million in Q1 2010. Not surprisingly, the publisher attributed a hefty chunk of those profits to continued sales of Call of Duty: Black Ops -- which it also confirmed is not just the best-selling game ever (in terms of revenue) in the US, but in Europe as well. In addition, the company noted that digital sales were up 30 percent over Q1 2010 and accounted for 30 percent of Activision Blizzard's revenue last quarter. Finally, although it comes second in the "Activision Blizzard" name, Blizzard was first in profit for the quarter. The unit accounted for a whopping $170 million in income, compared to Activision Publishing's $48 million.
Increased game sales 'partly offset' Warner Bros' revenue decline
The precise impact of Warner Bros. Interactive Entertainment on big daddy Time Warner's bottom line is pretty obscured. WBIE is a division within a division of the media behemoth, which didn't bother to include a line for "video games" in its first-quarter earnings report. Though the company did manage to share a few positive words about its game-making sub-division. Nestled somewhere underneath Time Warner's "Filmed Entertainment" umbrella (a.k.a. Warner Bros.), WBIE apparently performed admirably for a division that ultimately suffered declining revenues. Filmed Entertainment, which encompasses feature film, television, home video and "interactive game production and distribution" (that's video games!), saw its revenues slide 3 percent to $2.6 billion in the first three months of 2011, as compared to the prior-year first quarter. More noticeable was the division's 50 percent plunge to $155 million in "adjusted" operating income for the period. However, Time Warner noted in its report that "declines were partly offset" by "higher video games revenues," in addition to other factors relating to television. While it's impossible to parse out video game sales from what's dubbed "other content" in the earnings breakdown, this category did show the biggest year-over-year percentage growth of all content in the Filmed Entertainment division, even if its dollar-amount revenues were a fraction of theatrical and television products' hauls. Notably, Time Warner indicated that first-quarter game sales were "driven by Lego Star Wars 3: The Clone Wars," which was developed by Traveller's Tales, part of WBIE subsidiary TT Games. The game is published by LucasArts. As for Time Warner's outlook on Filmed Entertainment for the rest of the year, CEO Jeff Bewkes said during the earnings call, "With our strong film slate, the momentum in our TV business and several promising games, we continue to expect Warner will post record profits this year." Would it have killed him to namedrop Mortal Kombat and the next Batman? Jeez.
Mass Effect 3 delayed to adjust mechanics for 'larger market opportunity'
As saddened as we were by the news that Mass Effect 3 wouldn't reach us until next year, after an EA earnings call today we're hovering between befuddled and intrigued. When asked about the delay, EA boss John Riccitiello said, "Essentially, step by step, [BioWare is] adjusting some of the gameplay mechanics and some of the features that you'll see at E3 that can put this into a genre equivalent of shooter-meets-RPG, and essentially address a far larger market opportunity than Mass Effect 1 did and Mass Effect 2 began to approach." ... So what does that mean? Well, mentioning that Mass Effect 2 was closer to what EA's targeting would seem to indicate more of an emphasis on action. But if the company's looking for "a larger market opportunity" a multiplayer component seems a surefire way to achieve that. Here's hoping we remember to check this post after E3 to feel either really smart or a little sheepish about our prognosticating. Also, hello future us! Hope you're having a good summer!
EA grows digital sales in Q4, stems losses for fiscal year
EA enjoyed solid growth in the final quarter of its 2011 fiscal year (ending March 31), thanks in large part to a bump in digital revenue. Digital sales were up $67 million from the same period a year ago to $211 million. Good ol' boxed games weren't slouching though, as packaged goods revenue increased $44 million up to $838 million. In all, EA rebounded from its rough Q3 to record $151 million in profit during the fiscal fourth quarter. The engine for that growth was a surprisingly impressive quarterly lineup for the company. Seven of its titles from fiscal Q4 have surpassed 1 million units shipped, with Crysis 2, Dead Space 2 and Dragon Age 2 all over the 2-million-shipped mark. DLC for those titles (like Dead Space 2's "Severed" add-on) was the cornerstone of digital profits, as well. Over its entire 2011 fiscal year, EA shipped 12 million units of FIFA 11, 7 million copies of Bad Company 2 (released at the tail end of FY10), and five million each of Medal of Honor, Hot Pursuit and Madden 11. But it seems that, in the grand scheme, these titles weren't enough to alter EA's fortunes for the fiscal year, which ended in a $267 million loss for the company. We suppose there's still a bit of a silver lining, however -- those losses would seem to sting considerably less than the $677 million lost by EA just one year prior.
THQ sales slump for FY2011, looking to successful sequels in 2012
THQ has announced its earnings for fiscal year 2011, which ended March 31, 2011. Stacked up against last year's report, the publisher's net sales on a GAAP basis were down from $899 million to $665 million, a drop of $234 million overall. Its net loss saw a dramatic increase from $9.6 million to $135 million, most likely attributable to a large marketing push for Homefront and ramp-up in the number of titles in development. Brian Farrell, the company's president and CEO, decided to focus on the coming fiscal year in his statements, stating that "We expect to generate significant growth, profitability and cash in fiscal 2012, driven by the latest installments of multi-million unit selling franchises Saints Row, Red Faction, Warhammer 40,000, MX vs. ATV, UFC, WWE and uDraw." Net sales for Q4 2011 also slumped, totaling $124 million, down $74 million from $198 million in Q4 2010. The company's biggest release for the quarter, Homefront, shipped 2.6 million copies before March 31 according to Farrell. The title had sold through one million units as of March 24.
Xbox 360 sees record fiscal Q3 sales, Kinect sold 2.4M units in quarter
Microsoft reports results were up across the board in its fiscal-year third quarter (ending March 31, 2011), with the Redmond giant's Entertainment & Devices Division (EDD) -- that's Xbox and other stuff -- one of the standouts, enjoying 60 percent growth year-over-year. The group generated $1.94 billion in revenue and saw $225 million in profit in Q3, up 50 percent from the same period last fiscal year. 2.7 million Xbox 360 units were sold during the quarter, a new record for the console in Q3 sales (and up 70 percent over last year). Kinect sales followed suit with 2.4 million units sold in the quarter -- and passed the 10-million mark to boot. Microsoft expects revenue growth of at least 25 percent for the EDD during Q4, with "more to be shared at E3 in June." Overall, thanks to strong sales of Windows 7, Microsoft recorded Q3 revenues of $16.43 billion and a net income of $5.23 billion.
Nintendo profits fall 66% in fiscal year, 3DS sells 3.61 million
Nintendo's net income dropped to ¥77.6 billion ($946 million) for its fiscal year ending in March, marking the company's third year of profit declines. The figure is also well below the ¥200 billion ($2.13 billion) Nintendo estimated it would make at the conclusion of its previous fiscal year. If only Nintendo had some kind of distraction so investors wouldn't notice ... OMG, guyz, "Wii's successor" in 2012. Looking forward, Nintendo expects to have net sales of ¥1.1 trillion over the next year, a slight increase from the ¥1.01 trillion reported this year, but still below the ¥1.4 trillion in 2010 -- they may just be post-decimal figures when talking trillions, but those are hundreds of billions. The company is planning on a net income of ¥110 billion yen ($1.3 billion) by next March, through "vigorously" marketing the 3DS, releasing The Legend of Zelda: Skyward Sword for Wii and selling software from its "long-selling 'evergreen' titles." Nintendo noted in its financial report that it has not suffered any direct damage of the recent "Great East Japan Earthquake," but that an indirect impact is predicted regarding "individual consumption patterns or economic conditions in the future." Global unit sales life-to-date (March) of the Nintendo DS, 3DS and Wii hardware were 146.4 million units, 3.61 million units and 86.01 million units, respectively. Nintendo is expected to reveal a playable model of the "Wii's successor" at E3.
SouthPeak posts $2.1 million quarterly loss, future uncertain
Despite reclaiming rights to the My Baby franchise last year, SouthPeak continued to decline into potential insolvency during the second quarter (ending December 31, 2010) of its current fiscal year. Net revenue for the quarter was just $7.5 million, down $2.6 million from the same period the year before -- not that the company was profitable then, either. Despite revenues being down, however, SouthPeak's total losses for the recent quarter -- $2.1 million -- were actually an improvement of $500K over second quarter losses in the previous fiscal year. (That's one way to put a kind of positive spin on the company's bleak state of affairs.) As businesses tend to do in desperate times, SouthPeak assuaged investor concerns in its report with forward-looking statements that forecast a bright future for the publisher. Though no specific projects are mentioned, apparently "SouthPeak has also invested in key new titles from which the anticipated profits should help improve its financial prospects." Of course, the report also adds a far more grim disclaimer: "While the Company is committed to pursuing options to continue to address its viability as a going concern, there can be no assurance that the Company's efforts will prove successful." Not exactly confidence inspiring, folks.
Mad Catz posts record sales, income up 70% in fiscal Q3
Mad Catz has posted record sales for its fiscal third quarter, which ended December 31. Net sales of $92.9 million have been reported by the company, up from $48.7 million during the same period last year. The company reported net income (i.e. profit) of $9.69 million, up from $5.59 million during the same period last year, an increase of over 70 percent. The report does note, however, that gross profit margin -- an expression of how much money is earned versus how much is spent -- is slightly down over last year. The primary reason for the decreased margin is attributed to "a shift in the Company's sales mix which included higher levels of licensed products." In other words, all those popular game licenses aren't cheap. Still, this marks the second quarter in a row that Mad Catz has posted record results, so we doubt anyone is too broken up about it.
