IR Information

Semi-Annual Financial Results Briefing
for Fiscal Year Ending March 2012
Oct. 28, 2011
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Looking at the cumulative sales transition from the beginning of the year, the sales of PS3 are exceeding those of last year, but Wii’s sales showed a year-on-year loss. Xbox 360 is selling well in the U.S., but the transition is nearly the same as last year in Europe.
Even by just looking at this chart, you will understand that the increase in Wii’s sales at the end of last calendar year is a little unusual.


Here is a comparison of the sales of handheld hardware units in Europe compared to those of last year. The sales of the Nintendo DS turned out to be lower than those of last year because the Nintendo 3DS was released in March. However, similar to the situation in the U.S., the Nintendo DS kept selling a certain number of units even after the launch of the Nintendo 3DS.
This is the sales transition of the Nintendo 3DS. The start was very good, but there was a sharp decline after that. Like in the U.S., the Nintendo DS was selling better than the Nintendo 3DS. The sales improved after the markdown, but then they went down again. It is only very recently that the sales started to grow in anticipation of the titles which will be released in the year-end sales season.


When we compare the cumulative sales transition of this year to that of last year, the chart looks like this. Similar to the situation in the U.S., the aggregation of the sales transition of the Nintendo DS and the Nintendo 3DS is almost the same as the sales transition of the Nintendo DS in the previous year. Regarding the sales growth at the end of the year, we are aiming to create more momentum than last year.


Now, looking at the current situation, I think it is natural for many people to be concerned about whether Nintendo can actually stir excitement in the market in the year-end sales season.
To be more specific, in Japan, I believe that many people are actually feeling that there will be promising year-end excitement since the momentum of the Nintendo 3DS and the software lineup has been enriched, but


I believe the concern is that, without momentum, like in the U.S. and European markets, will the Wii and the Nintendo 3DS actually sell in the year-end sales season as expected?
I think it is especially difficult for those who forecast business results to have strong expectations of the year-end sales season looking at our current situation, a situation where we are behind the other platforms, since the current platform situation becomes a standard when determining the outcome for year-end sales.
Therefore, we have researched the sales proportion of the July-September sales versus the October-December sales, which are the year-end sales, for each platform during the last three years.


This chart shows to what extent each hardware performed better in October-December, the fourth quarter of the calendar year, than in the prior months, July-September, the third quarter of the calendar year, in the U.S. from 2008 through 2010.
We can see that the sales of each fourth quarter, which includes the year-end sales, are on average three times the sales of each third quarter in the U.S.

As for 2008, the growth of Wii sales in the year-end sales season were the same as other platforms since the Wii had sold well throughout that year.
However, for sales in the last two years, 2009 and 2010, the sales growth for the Wii at the year-end was outstanding compared to other platforms.
From our analysis, this is because, starting from 2009, the consumers who buy the Wii at the year-end are strongly affected by seasonality and the Wii has many software titles that can be enjoyed when many people gather together during the year-end holidays.
In fact, major retailers in the U.S. have great expectations for the year-end sales of the Wii this year, and we are preparing to cooperate with retailers to generate much excitement for the year-end.
Also, our handheld systems tend to rely on the year-end sales season, and in 2008 and 2009 there wasn’t such high dependency since the Nintendo DS sold well during the entire year; however, in 2010, we can see a higher dependency than other hardware systems.
For the last year-end sales season, we were able to gain these results despite the fact that we did not have any highly-anticipated titles for the Nintendo DS; therefore, we can assume that we will have a much higher year-end ratio this year since we are expecting several highly-anticipated titles.


This is the same breakdown for the European market. Data for the four major countries that constitute approximately 80% of the entire sales of the European market are used.
Compared to the U.S., the ratios for year-end sales are slightly lower in Europe; however, I think it is obvious that the Wii experienced outstanding growth in the past two years. Xbox 360 experienced high growth in 2008 and 2009 but this was due to an aggressive price promotion and the total number of sales was not so big.


Also, for the Nintendo 3DS hardware year-end sales trend, rather than looking at the current situation for the Nintendo DS where the platform has become widespread, I think it is more valuable to look at how the Nintendo DS spread at the initial stage as a comparison. Please take a look at the sales transition of the Nintendo DS until the second Christmas and the cumulative sales transition for the Nintendo 3DS since the launch which compares the sales for the corresponding time of the year.
Although there is a difference in the situation because the Nintendo DS was launched in the year-end sales period and was able to create a solid foundation in those two months while the Nintendo 3DS was launched in March, the recent sales curve of the red line, which shows the sales of the Nintendo 3DS, is far steeper than what the Nintendo DS experienced at the same period. Also, considering that some leading Nintendo 3DS titles will be released at the year-end, we are expecting a far more exciting year-end sales season this year compared to the second Christmas sales for the Nintendo DS.


This is the same data for Europe. In Europe, the Nintendo DS was also launched in March, and currently the penetration speed is on par with that of the Nintendo DS. We are aiming to surpass the performance of the Nintendo DS at this year-end sales season.


I would also like to share the data for the Japanese market. Japan was the first market to popularize the Nintendo DS, and it is therefore difficult for the cumulative sales of the Nintendo 3DS to catch up with the cumulative sales of Nintendo DS after its second year-end sales season, but by looking at the increase after the markdown of the Nintendo 3DS, we can see that the sales pace is now even better than that of the Nintendo DS in the corresponding period, so I think we can imagine large growth for the Nintendo 3DS in the year-end sales season.
Next week, after the launch of “Super Mario 3D Land,” we would like the Nintendo 3DS to become explosively widespread and sweep away some reports that game-dedicated devices are coming to an end.


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