Nintendo recently published a note in which it said it will report an annual operating loss of 45 billion yen ($575 million) for the December quarter. Analysts had expected the Japan-based gaming giant to report a 4.2 billion yen loss, Reuters said Thursday. The company now expects to ship 10 million Wii consoles, instead of the original 12 million projected, and 14 million units of its portable 3DS gaming consoles, down from 16 million units. ”We had higher expectations for the year-end season, but failed to meet them,” President Satoru Iwata said while speaking to press in Osaka, Japan. Three analysts speaking to Reuters all agreed that Nintendo needs to rethink its strategy and understand that consoles could be a thing of the past. ”Their time of growth [from console systems] is over, and, while I don’t think the company will cease to exist, if they don’t move into new categories, they will no doubt lose the great scale they’ve amassed,” Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management in Tokyo, told Reuters. Satoru Iwata has previously said that creating games for Apple’s iOS mobile platform is “absolutely not under consideration.”

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Nintendo announced on Tuesday that it has shipped more than 4 million 3DS units worldwide in nine months. That’s more than the number of Wii units Nintendo sold during that console’s first nine months on the market, though Nintendo did announce that it sold more than 4.5 million Wiis in the U.S. alone last year. “One of the strongest software lineups in our history helped Nintendo have a great holiday season and to close 2011 with a full head of steam,” said Scott Moffitt, Nintendo of America’s executive vice president of Sales & Marketing. “Not only have the new Mario and Zelda titles already broken records, but with strong reviews and satisfied customers sharing their positive experiences, all three are also shaping up to be the latest long-tail titles from Nintendo. Couple that with a massive first- and third party lineup in the first part of the year and the prospects for 2012 are extremely promising.” The 3DS initially had a slow start, but Nintendo’s decision to slash the price of the console helped boost sales almost immediately. The addition of new hit titles, such as Mario Kart 7, Super Mario 3D Land and the Legend of Zelda: Ocarina of Time 3D also helped attract new buyers. Nintendo’s full press release follows after the break.

Nintendo 3DS Crosses 4 Million Mark

Driven by Fast-Selling Software Nintendo 3DS Sells More in Its First Nine Months Than Wii Did

REDMOND, Wash.–(BUSINESS WIRE)–Whether they were on the go or at home, whether they played in 2D on the TV or in glasses-free 3D in their hands, gamers of all ages celebrated the holidays with Mario and Zelda. Super Mario 3D Land and Mario Kart 7 for the Nintendo 3DS system not only became the fastest-selling titles in the history of their respective franchises when they launched, but they are now also the first Nintendo 3DS titles to sell 1 million units each in the United States. On the console side, The Legend of Zelda: Skyward Sword, which also broke launch records, became the 45th Wii title to sell more than 1 million units in the United States.

“One of the strongest software lineups in our history helped Nintendo have a great holiday season and to close 2011 with a full head of steam,” said Scott Moffitt, Nintendo of America’s executive vice president of Sales & Marketing. “Not only have the new Mario and Zelda titles already broken records, but with strong reviews and satisfied customers sharing their positive experiences, all three are also shaping up to be the latest long-tail titles from Nintendo. Couple that with a massive first- and third party lineup in the first part of the year and the prospects for 2012 are extremely promising.”

Nintendo sold more than 12 million total hardware units in the United States in 2011, marking the fifth year in a row that the company has accomplished that feat. This includes more than 4.5 million units of Wii, more than 4 million Nintendo 3DS systems, and more than 3.4 million units of the Nintendo DS family of systems. This brings the installed base for Wii and Nintendo DS to 39 million and more than 51 million, respectively.

With a strong lineup of software on the horizon, including new installments in the Mario Party, Pokémon and Kid Icarus franchises, as well as third-party games such as Resident Evil Revelations from Capcom and METAL GEAR SOLID 3D Snake Eaterfrom Konami for Nintendo 3DS, that momentum should continue into the first quarter of 2012 and beyond.

In addition to the milestones reached by new software, two evergreen Nintendo titles celebrated milestones as 2011 drew to a close. Mario Kart Wii passed 11 million units sold and New Super Mario Bros. for the Nintendo DS family crossed 10 million total units sold.

Remember that Wii and Nintendo 3DS feature parental controls that let adults manage the content their children can access. For more information about this and other features, visit http://www.nintendo.com/wii or http://www.nintendo.com/3ds.

New data from Nielsen suggests that console owners are using their Xbox 360, PS3 and Wii game consoles to stream video content more than ever before. “Streaming now represents a reported 14 percent of Xbox 360 time, 15 percent of PS3 time and 33 percent of Wii time,” Nielsen said Wednesday. The market research firm explained that the growth in time spent streaming was driven by services such as ESPN 3, Netflix, MLB Network and Hulu, but that time spent using consoles also increased overall. Console usage during the first half of 2011 jumped 7% from the same time period last year. Nielsen said gaming is the most popular activity on Xbox 360 (34% of usage), the PS3 is most used for DVD/Blu-ray viewing (22% of usage) and the Wii is used most for offline gaming (55% of usage).

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Sales of Microsoft’s Xbox 360 video game console trounced the competition in November, nearly doubling PlayStation 3 sales and sales of Nintendo’s Wii console. According to November sales data from leading market research firm The NPD Group, Microsoft sold 1.7 million Xbox 360 consoles in November. While Sony managed unit sales growth of about 70% year-over-year, the company only sold about 900,000 PlayStation 3 consoles last month. Nintendo sold 860,000 Wii consoles, 795,000 portable Nintendo 3DS consoles and 350,000 older Nintendo DS units in November. “This is the fourth consecutive month in which the Xbox 360 has been the top selling hardware system,” NPD analyst Anita Frazier said in a statement. “The gap between 360 sales and sales of the next best selling platform was the largest we’ve seen since December 2008 when the Nintendo DS was the top selling system.” Total industry sales were up less than 1% to $3.00 billion in November according to NPD, and hardware sales dipped 9% from 2010 to $982.4 million. Software sales were up 15% year-over-year to $1.67 billion but accessory sales dropped 34% to $273.8 million despite strong holiday sales of Microsoft’s Kinect controller. The NPD Group’s list of the 10 best-selling video game titles in November follows below.

Nintendo announced earlier this week that the company kicked off the holiday shopping season with a bang, having seen record-setting sales of its Wii and multiple game titles. Nintendo sold more than 500,000 Wii consoles on Black Friday 2011 alone, making it the console’s biggest Black Friday ever. The company’s newest addition to the Zelda franchise, The Legend of Zelda: Skyward Sword, sold 535,000 copies since launching on November 20th to become the fastest-selling Zelda game of all time. Super Mario 3D Land, the first 3D Mario game for the Nintendo 3DS, sold more than 500,000 in two weeks, making it the fastest-selling Mario game of all time. Read on for more.

“What this has been able to do is drive our Nintendo 3DS business in only eight months to surpass the full first year volume of the original DS and we still have the bulk of the holiday to go, and we still have the launch of Mario Kart 7 (out Sunday, Dec. 4) to continue driving our full-year sales on Nintendo 3DS,” Nintendo of America president Reggie Fils-Aime said in a statement, noting that last week’s 3DS console sales were up 325% over the week prior.

“We know that Black Friday and that entire week is a key selling week and it is important for products like ours to have a jump in momentum and we were fortunate to see that,” Fils-Aime added. “For us, it really was driven by unique and powerful software and what gives us confidence is that we still have more software to launch in the balance of this holiday period.”

Sales of video games and video game hardware remained lackluster in October according to market research giant The NPD Group. Overall industry sales in the U.S. grew just 1% to $1.08 billion last month compared to October 2010. Total hardware sales were up 6% year-over-year to $295.6 million in October, and software sales were up 3% to $621.3 million. Sales of video game accessories in the U.S. dipped 5% to $135.9 million last month. Microsoft’s Xbox showed the most impressive growth among home consoles with unit sales up 20% from last October, while sales of Nintendo’s 3DS/DS line topped portable devices with 25% growth. November numbers should be a bit more impressive ahead of the holidays thanks to holiday sales paired with a number of high-profile launches including Call of Duty: Modern Warfare 3, which pulled in a record $400 million in sales during its first 24 hours of availability, and Halo Anniversary, which launches on Tuesday. NPD’s list of the top-10 video game titles follows below.

The wait is finally over and late Tuesday evening we’ll be making our way over to our local game store to pick up Call of Duty: Modern Warfare 3. The latest title in Activision’s hit series achieved record pre-order figures, surpassing even the staggering pre-orders totals racked by by Call of Duty: Black Ops. The single-player campaign will pick up right where we were left off at the end of Call of Duty: Modern Warfare 2 but, let’s be honest, we’re all in it for the multiplayer matches and revamped perk system. Activision is also offering a “Call of Duty Elite” option that costs $50 per year and allows gamers to connect with other players, manage load-outs and more from the web, a game console or a mobile device. The full press release follows after the break. Frag out!

Sales of video game hardware, software and accessories in the United States continued to slide in August according to new data from NPD Group, again dipping more than 20% compared to the same period last year. Overall industry sales slid 23% to $669.9 million last month from $873.8 million in August 2010. Hardware sales were down 12% from last year to $249.4 million, accessory sales were down just 1% to $134.7 million and software sales plummeted 34% to $264.8 million. ”August 2011 sales saw a decline versus August 2010 in all categories except for portable games hardware,” said NPD analyst Anita Frazier in a statement. “In software, the bulk of the decline can be attributed to the shift of the annual Madden release from August to September (8/30 release falls within NPD’s September 2011 reporting period).” Frazier continued, “Even though year to date performance of the new physical portion of the industry is down 5%, more than half of industry sales in this channel are still to be realized in the back four months of the year.  Given the strong release schedule in the coming months, new physical retail sales could still be flat to slightly up once full year sales are tallied.” Microsoft’s Xbox 360 was the best-selling console for the seventh consecutive month in August with 308,000 units sold. NPD’s top-10 list of video game software title sales in the month of August follows below.

Much has been made of the video game console business’ steady decline, and rightfully so; console sales have dropped considerably in recent months. Some attribute the sliding sales to a weakened economy while a minority believe trends are turning toward casual mobile gaming, but market research firm IDC says we shouldn’t be sounding any alarms just yet. In a new report, IDC suggests that console gaming will begin to reverse current downward trends in 2012, with a big-time resurgence to follow in the coming years. “Total console hardware and disc-based software revenues are on track to slide a few percent in 2011 compared to 2010,” Lewis Ward, an IDC research manager, said in a statement. “But prognostications that consoles have peaked as a product category are premature. I expect that the launch of the Wii U, a revamped interactive entertainment console from Microsoft in the 2014 timeframe, and the arrival of Sony’s ‘PS4′ circa 2015 – along with more than a few exclusive, innovative games – will help drive a new wave of console-centric spending in the next several years.” Of course the market could rebound even sooner than that. BGR reported exclusively that Microsoft may be preparing to unveil a new Xbox model as soon as E3 2012, and Sony could be fast-tracking plans for a new PlayStation 4 console as well. The Xbox is now six years old, Sony’s PlayStation 3 is five years old and Nintendo’s Wii is almost five years old as well. As quickly as technology now evolves, it shouldn’t be any mystery that console sales are currently waning. IDC’s press release follows below.

IDC Finds the Demise of Game Consoles Is Greatly Exaggerated

18 Aug 2011

FRAMINGHAM, Mass., August 18, 2011 – Despite recent macroeconomic instability and particularly weak overall video game spending in North America this summer, the latest International Data Corporation (IDC) forecast of the worldwide video game and interactive entertainment console market points to a rebound beginning in 2012, largely driven by new platform releases and rising console penetration and spending in select developing economies.

“Total console hardware and disc-based software revenues are on track to slide a few percent in 2011 compared to 2010,” says Lewis Ward, research manager, Consumer Markets: Gaming, at IDC. “But prognostications that consoles have peaked as a product category are premature. I expect that the launch of the Wii U, a revamped interactive entertainment console from Microsoft in the 2014 timeframe, and the arrival of Sony’s ‘PS4′ circa 2015 – along with more than a few exclusive, innovative games – will help drive a new wave of console-centric spending in the next several years.”

IDC forecasts direct global console hardware and disc software sale revenue will increase at a compound annual growth rate (CAGR) of 3.6% from 2010 to 2015, reaching $39.7 billion in 2015 with developing economy growth rates about twice those in developed markets. Despite this rebound, the installed base of actively used game consoles won’t keep pace with the number of worldwide households. IDC expects there to be about 257 million active consoles worldwide by 2015, or 12.7% of anticipated households that year, down about 1% when compared to same console penetration figure for 2011. In this sense, it’s possible to conclude that console popularity will slip due to the rise of media tablet gaming, casual, free-to-play/social online PC games, etc.

This IDC study, Worldwide Game and Interactive Entertainment Console Hardware and Software 2011 -2015 Forecast (IDC #229438), assesses and forecasts the demand for, usage of, and revenue associated with video game console hardware and software on a worldwide basis through 2015. It provides a competitive assessment of the leading current-generation console platforms based on survey data, interviews, and other research sources and models next-generation platform releases based on historical precedent and other inputs. Worldwide game console totals are broken down into four regions: North America, Western Europe, Japan, and the rest of the world.

The forecast also shows the PS3 will have the largest active installed base of any game console worldwide by 2015. In this sense, the PS2′s “long tail” may ultimately repeat.

U.S. video game industry sales were down 26% in July compared to the same period last year according to new data published by The NPD Group. Hardware sales were down 29% year-over-year to $223 million, video game software sales dipped 17% to $336.2 million and sales of video game accessories were down 8% to $127.8 million. Microsoft’s Xbox 360 was the best-selling console in the U.S. for the seventh consecutive month with unit sales of 277,000, though July marked the first time the Xbox saw a year-on-year decline since December 2009. ”There is no getting around the fact that video game sales in the new physical retail channel suffered its lowest month since October 2006,” NPD analyst Anita Frazier said in a statement. “Despite the very rough month, new physical retail sales are down just 4% year-to-date and based on seasonality trends observed over the last 10 years, which have been remarkably stable year-in, year-out, industry sales in this particular channel are poised to land in the flat to -2% range once the total year is completed.” NPD’s top-10 list of video game software title sales in the month of July follows below.

Image source: Kristen Lanae

Redbox on Thursday announced that it will add video game rentals to an additional 5,000 kiosks beginning August 1st. The company announced last month that game titles for the Microsoft Xbox 360, Sony PlayStation and Nintendo Wii would be added to 16,000 more redbox kiosks by the end of June, and the total after this coming round of additions will approach 27,000. Redbox owns and operated approximately 33,000 rental kiosks around the country, and the company did not indicate if or when video games might be added to the remaining 6,000 kiosks. ”Whether customers are playing a new game or genre, trying a game before they buy it or simply entertaining friends and family, they’re embracing the availability of games at redbox,” said Joel Resnik, vice president of video games, in a statement. Company president Mitch Lowe continued, “More than 1.5 billion movie rentals and the positive consumer reaction to video games highlight the ongoing demand for physical media.” All game titles carried in redbox kiosks can be rented for $2 per night. Redbox’s full press release follows below.

PLAY MORE!  REDBOX ANNOUNCES VIDEO GAMES WILL ROLL OUT TO APPROXIMATELY 5,000 ADDITIONAL KIOSKS

Milestones:  Redbox Surpasses 4 Millionth Game Rental and 1.5 Billionth Movie Rental

OAKBROOK TERRACE, Ill. – July 28, 2011 – Following last month’s launch of video game rentals, redbox announced today it will expand video game rentals to approximately 5,000 additional redbox^® kiosks beginning August 1.  Even more consumers will soon have the opportunity to discover and rent the latest PlayStation^® 3, Nintendo Wii™ and Xbox 360^® games at approximately 27,000 kiosks nationwide.

“Whether customers are playing a new game or genre, trying a game before they buy it or simply entertaining friends and family, they’re embracing the availability of games at redbox,” said Joel Resnik, vice president of video games, redbox.

Redbox recently rented its 4 millionth video game since the company began testing game rentals in 2009. In addition, redbox reached its 1.5 billionth movie rental this June – yet another milestone in its eight-year history.

“More than 1.5 billion movie rentals and the positive consumer reaction to video games highlight the ongoing demand for physical media,” said Mitch Lowe, president, redbox.

With 68 percent of the U.S. population living within a five-minute drive of a redbox^® kiosk*, finding the most convenient location around the corner or on the go is easy at www.redbox.com or via the redbox iPhone^® or Android™ mobile apps. Since its launch in November 2009, the iPhone app has been downloaded nearly 4.5 million times, and the Android app has been downloaded more than 2 million times since it launched in February 2011. Plus, the redbox rent and return anywhere^® policy allows families to rent at one destination and return at another.  Redbox rents new-release movies and video games for as low as a buck a day for DVDs.

Nintendo posted its first quarterly operating loss ever on Thursday in its fiscal first quarter earnings report. The Japanese gaming company recorded a net loss of 25.5 billion Yen ($328 million), which was on a par with the net loss of 25.2 billion Yen ($324 million) the firm reported during the same quarter last year. In addition, it posted a net operating loss of 37.7 billion Yen ($485 million), down from an operating profit of 23.3 billion Yen ($299 million) during the first quarter of 2010. Nintendo also slashed the price of the 3DS to $169.99, down from the portable gaming console’s original $249.99 price point. Nintendo attributed the poor quarter to a lack of Wii and DS sales, as well as a lack of attractive games for the 3DS.

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Sales of video game hardware and software declined 10% in June according to new data reported by industry watcher The NPD Group. Total content sales including home consoles, portable consoles and PC game sales totaled $1.03 billion last month, down 10% from June 2010. Hardware sales declined 9% from $401.7 million in June 2010 to $366.6 million last month, and software sales dropped 12% over the same period to $469.5 million. Video game accessory sales also declined from June of last year, dropping 11% from $177.7 million in 2010 to $158.9 million last month. Game publisher Take 2 Interactive was responsible for the two best-selling games in June, with L.A. Noire occupying the top spot and Duke Nukem Forever coming in at No. 2 despite low ratings from reviewers. Sony’s Infamous 2 was the third best-selling game for the month, while Disney’s Lego Pirates of the Caribbean: The Video Game and Nintendo’s Legend of Zelda: Ocarina of Time 3D rounded out the top-5. Overall hardware, software and accessory sales in the first half declined 2.4% compared to the first half of 2010. A list of The NPD Group’s top-10 software titles for the month of June follow below.

Gartner Says Spending on Gaming to Exceed $74 Billion in 2011

Gaming Software Spending Dominates but Online Gaming Growing Fastest Over the Next Five Years

Egham, UK, July 5, 2011— 

The gaming ecosystem is undergoing major technology and business model transitions that will last beyond 2015. Gartner, Inc. estimates that worldwide spending on the gaming ecosystem* will exceed $74 billion in 2011, up 10.4 percent from 2010 spending of $67 billion. By 2015, spending will reach $112 billion.

Overall, Gartner estimates that the gaming software component will represent $44.7 billion in 2011, and it will continue to dominate the overall gaming market in the next five years as it absorbs almost two-thirds of consumers’ gaming budgets.

“This large market size means that many consumers embrace gaming as a core piece of their entertainment budget and will continue to play as long as game publishers deliver compelling and fun games,” said Fabrizio Biscotti, research director at Gartner.

In 2011, the gaming software spending will be followed at a distance by gaming hardware and online gaming, reaching $17.8 billion and $11.9 billion, respectively (see Table 1).

Table 1: Total Gaming Market Spending, 2010-2015 (Millions of Dollars)

	2011	2013	2015
Gaming Hardware	17,797	24,621	27,354
Gaming Software	44,730	51,129	56,512
Online Gaming	11,899	21,453	28,298
Total	74,426	97,204	112,163

Source: Gartner (June 2011)

Within the gaming software market, mobile gaming will experience the largest growth opportunity with its share growing from 15 percent in 2010 to 20 percent in 2015.

“As the popularity of smartphones and tablets continues to expand, gaming will remain a key component in the use of these devices. Although they are never used primarily for gaming, mobile games are the most downloaded application category across most application stores,” said Tuong Nguyen, principal research analyst at Gartner. “For this reason, mobile gaming will continue to thrive as more consumers expand their use of new and innovative portable connected devices.”

The segment that will drive the largest revenue will come from video game consoles (hardware and software). In 2010, it generated more than two-thirds of the gaming ecosystem revenue, and Gartner predicts revenue to grow 4 percent in 2011.

Over the next five years, gaming hardware’s market share will remain constant while software spending will lose share to online-gaming spending, the fastest-growing segment. Gartner estimates consumer spending on global online gaming (subscriptions and microtransactions) will show a compound annual growth rate of 27 percent through 2015, with consumer spending on subscription fees slightly declining while spending on virtual goods will grow exponentially.

“We find that subscription fees are giving way to ‘freemium’ models, in which the game is provided for free to gamers but is monetized through advertising (both in-game advertising and display advertising) and in-game microtransactions, such as the sale of value-added services or virtual-good purchases,” said Brian Blau, research director at Gartner. “This trend is prevailing given the rise of social gaming, in which online gaming is connected to social networking sites and social networking platforms.”

“Users have become multichannel-oriented by choice and expect vendors to continue to deliver quality content and experiences by extending their gaming possibilities across multiple platforms,” said Mr. Blau. “If today’s mobile technology does not evolve quickly enough, the gaming industry is set to see the rate of innovation severely decline. Alternatively, it will provide opportunities in technology and content genres that we can’t foresee today.”

Additional information is available in the Gartner report “Market Trends: Gaming Ecosystem, 2011″ at http://www.gartner.com/resId=1724014.

In a recent interview with Forbes, Nintendo of America’s president and chief operating officer Reggie Fils-Aime was asked how his company will market the new Nintendo Wii U console — given that the existing Wii will still be on the market. Fils-Aime responded by noting that the console will not launch until after April 1st of next year — a date we hadn’t heard yet — and that, historically, Nintendo has sold multiple devices side by side. Fils-Aime pointed to the launch of the Nintendo DS alongside the Gameboy Advance, and also said that the Wii was on the market at the same time as the Game Cube. He also discussed cross-platform play, which could allow users to play against one another using different Nintendo machines “We have one key developer with a very strong relationship to Nintendo, the same developer who created Smash Brothers, that is envisioning a Smash Brothers experience that will be cross platform between Wii U and 3DS,” Fils-Aime said. Nintendo took the wraps off of the highly anticipated Wii U during the E3 tradeshow early last month, but has yet to announce a price for the console.

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