Nintendo reports $49M loss as Wii U sales plummet in Q1 2016

It’s finally here, folks: Nintendo’s quarterly earnings day has never been so anticipated. But the Pokémon phenomenon hasn’t translated into success for the games giant — Nintendo carded a $49 million loss (5.13 billion yen) for Q1 2016 on revenue of $587 million (62 billion yen), down 30 percent.

Nintendo had already explained that Pokémania has little financial impact on its business, despite taking its valuation past $40 billion in recent weeks. The game launched after this quarter, it’s important to note, so it is not reflected in this earnings report — it was its Wii U business that cut deepest for the April-June period. Nintendo sold 50 percent less of the console than one year previous — just 220,000 units — while it also suggested that a stronger Yen had an impact given that close to three-quarters of its sales are from outside of Japan.

The Wii U looks to have had its days in the sun, but Nintendo has a number of new irons in the fire.

The Nintendo NX, its next flagship console, is scheduled to launch in March 2017 and, if recent reports are to be believed, it’ll be a high-powered portable device that Nintendo will hope appeals to a new-generation of gamers.

Nintendo also has potential on mobile, having released its first iOS and Android game this year. Revenue from Miitomo, which has seen its popularity shrink of late despite once having 10 million users, hasn’t been amazing but it’s a start. Nintendo reported 1.65 billion yen ($15.6 million) in revenue from smart devices products and IP licensing, which includes Miitomo.

Miitomo is a very Nintendo-y game that most likely has very limited appeal to newer audiences, but the firm said today it has at least two new titles coming to mobile this year — Fire Emblem and Animal Crossing — which will likely raise revenue from smartphones.

Then there is Pokémon Go. While Nintendo’s equity is Niantic Labs is 13 percent, after it invested last year, and it has a 32 percent holding in The Pokémon Company, there’s still money to be made there. In particular, the game has just begun allowing “sponsored locations” — initially with McDonald’s in Japan — and there is a $30 wearable device on its way, albeit with a later launch date of September.

There’s also a miniature version of its iconic NES console. At $60, it isn’t likely to change Nintendo’s financials single-handedly, but it is one of a number of projects that is making Nintendo more relevant again and that does bode well for the future.

Article headline updated 27/07 04:50 PDT for clarity