Get jumping, Mario. Nintendo is in need of cash and another lease on life after reporting Friday that it has cut its sales estimates for several of its game systems and is projecting an annual loss of $240 million.
In a statement explaining the painful financial report, Nintendo President Satoru Iwata said that while sales of the company’s latest Wii U console “showed some progress” at the end of the year, the recovery was not enough. Nintendo originally projected that it would sell 9 million consoles between April 2013 and March 2014; now the company has cut that forecast to 2.8 million units. Projections for software sales were also cut — halved, in fact, to 19 million from 38 million.
The low sales are even more striking given that high demand for new consoles from Sony and Microsoft have sent the sales of video-game hardware in December up 28 percent from the same period last year — the highest since December 2010. Sony boasted its console sold 4.2 million units, globally, in a little over a month; Microsoft reported global sales of 3 million Xbox One consoles in a similar period of time.
Perhaps most concerning for Nintendo is that the sales slump wasn’t only for the Wii U console, which has struggled to gain a strong following since its introduction in 2012, but also for its handheld Nintendo 3DS and older Wii console. The company had to revise its estimates for the 3DS down to 13.5 million units from 18 million units. Projections for the Wii fell to 1.2 million from 2 million.
With all the bad news for the company, Iwata has said the company will more seriously consider a “new business structure” and look at the expansion of gaming in the mobile world.
“Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business,” Iwata said, according to a report from Bloomberg News. But, he cautioned, “It’s not as simple as enabling Mario to move on a smartphone.”
— Hayley Tsukayama
Down to Earth Designs has settled Federal Trade Commission charges that it misled consumers about how environmentally friendly its diapers and wipes are.
The Portland, Ore.-based company sells gDiapers. They include a reusable outer shell and disposable pad inner liners, as well as baby wipes.
According to the FTC’s complaint, the company advertised both gRefills and gWipes as biodegradable and compostable. The company also claimed that gDiapers were plastic-free, and that flushing gRefills was beneficial to the environment. But the FTC says some of these claims are false or misleading.
The commission said that the refills and wipes are not biodegradable because they do not completely break down and decompose into elements found in nature within one year after disposal in the trash. It also says the company has not obtained independent, third-party certification of biodegradability. It also took concern with the clarity of its home compost claims and noted that some parts contain plastic.
“The claims for these diapers just didn’t pass our smell test,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in a statement Friday.
The proposed order would prohibit the company from making any untrue, misleading or unsubstantiated claims.
— Associated Press
● Freedom Industries, the chemicals maker whose leaky storage tank polluted the Elk River in West Virginia, filed for bankruptcy eight days after the incident shut water service to the state’s biggest city. Freedom Industries listed assets and debt of as much as $10 million each in its Chapter 11 petition filed Friday in U.S. Bankruptcy Court in Charleston, W.Va. The filing seeks protection from the company’s creditors and may halt more than two dozen lawsuits that residents and business owners have already filed over the spill.
● Dropbox has secured $250 million from Blackrock and other investors in a new funding round that values the provider of online storage services at almost $10 billion, the Wall Street Journal cited unidentified persons as saying. Dropbox, the six-year-old Silicon Valley startup that many expect to go public sometime this year, is taking advantage of flush investors and skyrocketing valuations for fledgling tech companies.
● Jos. A. Bank Clothier has rejected a $1.61 billion takeover offer from rival Men’s Wearhouse. The two men’s clothing retailers have been engaged in a strange courtship for months. Jos. A. Bank made a bid for Men’s Wearhouse last year that was rejected. Men’s Wearhouse then turned the tables and made a bid for Jos. A. Bank that was denied in December.
● Intel plans to trim more than 5,000 jobs from its workforce this year in an effort to boost its earnings amid waning demand for its personal computer chips. The Santa Clara, Calif., company confirmed the job cuts Friday, the day after Intel reported its profit and revenue had fallen for the second consecutive year. The purge represents about 5 percent of the nearly 108,000 jobs that Intel had on its payroll at the end of December.