Nintendo 2011 Annual Report Download - page 22

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18
Nintendo continues to pursue its basic strategy of Gaming Population Expansion by offering compelling products that anyone
can enjoy, regardless of age, gender, or gaming experience.
During the fiscal year ended March 2011, to commemorate the 25th anniversary of Nintendo’s major title Super Mario Bros.,
special edition red versions of Nintendo DSi XL and Wii hardware were launched worldwide along with Wii software Super Mario
All-Stars Limited Edition as the revival of Super NES software Super Mario All-Stars, combining various classic Super Mario titles.
This sales promotion, appealing to those who had long been away from video games or never played video games before, as well
as our existing users, contributed to strong sales.
In addition, within the handheld device segment of the electronic entertainment division, sales of Pokémon Black Version and
Pokémon White Version became robust in and out of Japan. In the home console business, strong sales were realized on several
titles including Super Mario Galaxy 2, an action game featuring Mario’s adventures throughout the galaxy, Wii Party, which features
party games that anyone can enjoy, Donkey Kong Country Returns in which the popular character runs, jumps and climbs while on
a quest, and also titles launched during last fiscal year, such as New Super Mario Bros. Wii and Wii Fit Plus.
Furthermore, Nintendo 3DS, a new handheld device which allows 3D gameplay without the need for any special glasses,
released in February in Japan and in March in the United States, Europe, and Australia, had a smooth start in sales at its launch.
However, compared to last year, when December 2009 had monthly record sales in our largest market, the United States, sales
went down for both hardware and software. Sales went down in Japan and Europe as well.
As a result, the worldwide sales of the Nintendo DS series, Nintendo 3DS, and Wii hardware were 17.52 million units, 3.61
million units, and 15.08 million units respectively. The worldwide sales units of the Nintendo DS series, Nintendo 3DS, and Wii
software were 120.98 million, 9.43 million and 171.26 million respectively. The number of million-seller titles life-to-date (including
third-party publisher titles) for the Nintendo DS series increased from 114 to 139, while Wii increased from 79 to 103 titles,
compared with the end of last fiscal year. Nintendo 3DS had two million-seller titles for this fiscal year.
Due to appreciation of the yen and the price reduction of Nintendo DS series hardware, net sales were 1,014.3 billion yen
(US$12,221 million) (of which overseas sales were 846.4 billion yen (US$10,198 million), or 83.4% of the total sales) and operating
income was 171.0 billion yen (US$2,061 million). In addition, due to exchange losses totaling 49.4 billion yen (US$595 million)
primarily caused by the reevaluation of assets in foreign currencies, ordinary income was 128.1 billion yen (US$1,543 million), and
net income was 77.6 billion yen (US$ 935 million).
Overview
Listed below are the various risks that could significantly affect Nintendo’s operating performance, share price, and financial
condition. However, unpredictable risks may exist other than the risks set forth herein.
Note that matters pertaining to the future presented herein are determined by Nintendo as of the end of annual consolidated
fiscal period ended March 31, 2011.
(1) Risks around economic environment
•Fluctuation in foreign exchange rates
Nintendo distributes its products globally with overseas sales accounting for approximately 80% of total sales. The majority of
monetary transactions are made in local currencies. In addition, the Company holds a substantial amount of assets in foreign
currencies including cash and deposits without exchange contracts and so forth. Thus, fluctuation in foreign exchange rates
would have a direct influence on earnings not only when foreign currencies are converted to Japanese yen but also when
revaluated for financial reporting purposes. Japanese yen appreciation against the U.S. dollar or Euro would have a negative
impact on profitability.
Risk Factors
•Fluctuation of market envir
•Development of new pr
•Pr
Pr
•Overseas business expansion and inter
•Dependency on outside manufactur
•Business operations af
Analysis of Operations and Financial Review