Nintendo Reports Losses in First-Half of Fiscal Year 2011; Exchange Rates the Biggest Culprit

Would you be shocked if you heard that Nintendo reported a loss for the first-half of the fiscal year? I mean, this is the company that...

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Would you be shocked if you heard that Nintendo reported a loss for the first-half of the fiscal year? I mean, this is the company that consistently charts at the top of NPD's hardware and software (at least first-party) for its widely popular Nintendo Wii and Nintendo DS. Sadly, for Nintendo, losses were reported.

In its earnings report [PDF] for the first-half of the fiscal year 2011, Nintendo announced net losses of ¥2 billion ($24.6M). The good news is that the loss really has more to do with the appreciating yen rather than assumed sales drops.

According to the report, 81.4 percent of the company's total net sales within the six-month recording period came from overseas.

So, of the ¥363.1 billion ($4.47B) in net sales earned in the reporting period, ¥295.4 billion ($3.6B) came from outside of Japan. When that money was then turned over and brought into Nintendo's own backyard, it suffered massive exchange losses to the tune of ¥62.1 billion ($766M), translating to a total net loss of ¥2 billion ($24.6M) for the reporting period--between April and September 2010.

Nintendo's sales remain strong. The company reports 4.07 million units of Pokemon Black and White have flown off Japanese store shelves since launching on September 18--and we presume the same will happen on this side of the planet, come spring 2011. Nintendo's portly-plumber also did well, as Super Mario Galaxy 2 moved a total 5.1 million units worldwide since launching in May.

In the six-month reporting period, the Nintendo Wii sold 4.97 million units along with 65.21 million software units, globally. Nintendo's various DS models combined for 6.69 million units around the world with a combined 54.84 million software units sold.

Sadly, for Nintendo, with the yen appreciating in value so rapidly, these kind of losses are inevitable. If you're thinking about moving operations on this side of the world to save some of those stray dollars, you're more than welcome to crash on my couch.

Xav de Matos was previously a games journalist creating content at Shacknews.

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