OCT. 29, 2015 • For the fiscal quarter ending September 30, Sony Computer Ent. shipped 4 million PlayStations 4 units, up from 3 million units the previous quarter. For the entire 2015 fiscal year ending March 31, SCE revised the expected total of PlayStation 4 shipments to 17.5 million units, up from the previous estimate of 16.5 million units. This was actually right in line with DFC Intelligence’s recent forecast of 17.6 million units. Factor in the 14.8 million units shipped in fiscal year 2014, and the PS4 is on track to worldwide shipments of 32.3 million by next March. An increase in software sales for the console, plus the impact in currency exchange rates helped the Game & Network Services group to increase revenue for the second fiscal quarter 16.5% to ¥360.7 billion ($2.9 billion), with operating income of ¥23.9 billion ($197 million). Those results helped fuel a overall corporate profit of ¥33.6 billion ($277 million) for the quarter, with Sony saying it expects to turn in a full year profit of ¥140 billion ($1.2 billion). By comparison, the Motion Pictures group saw a growth in revenue of 0.9% to ¥183.7 billion ($1.5 billion), and posting a loss in operating income of -¥22.5 billion (-$186 million).

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Fiscal reports were also positive for Nintendo Co. Ltd., which posted an operating profit of ¥8.98 billion ($74 million) in the first half of the fiscal year for the first time in five years. From April to September last year, Nintendo showed a loss of ¥215 million ($1.7 million). Sales of the Nintendo 3DS family of portable devices for the six month period were up to 2.28 million units worldwide compared to 2.1 million units for the same quarters last year. Sales of 3DS titles declined, however, to 19.2 million from 23.3 million. The leading 3DS title was Animal Crossing: Happy Home Designer at 2 million units. Sales of the Wii U grew slightly to 1.2 million units from 1.1 million. Wii U software fared better with sales of 12.4 million units, up from 9.4 million. Since May, Splatoon has sold 2.42 million units, and Super Mario Maker moved 1.88 million copies in September alone.

In related news, Nintendo presented information about its first mobile game in partnership with DeNA Co. Ltd., called Miitomo. The title will be free-to-play with colorful add-ons that can be purchased. Users create their own Mii avatars, and during the process are asked questions about themselves. With other Miitomo users who have been listed as friends, the avatars will share player background to enhance gameplay. These Miis may also be ported to games on Nintendo hardware. Instead of this year, Miitomo has been pushed back to a release next March to give Nintendo more time to test and market the title. The other four mobile games that Nintendo is working on will be released by March 2017. Global launches will be decided on a title-by-title basis.

A meet & greet in Miitomo.

Impact: Sony is definitely in the midst of a turnaround after many years of disappointing financial results. While the motion pictures and Mobile Communications groups posted losses, Game & Network Services, Imaging Products & Solutions, Home Entertainment & Sound, Devices and Music all saw positive operating income. As for the PlayStation 4, consumer demand remains strong and steady and is on track to reach the recent DFC Intelligence forecast. The lack of standout software exclusives, plus aggressive discounting of bundle promotions by Microsoft Corp. will likely give the edge to the Xbox One during the holidays, yet the overall advantage will continue to remain with the PS4 on an annual basis. As in the days of the PlayStation 2, the console business is stabilizing and lifting Sony’s corporate prospects.

Nintendo’s fortunes are improved but still something of a concern. The increase in 3DS hardware sales is positive, yet the decrease in software units sold is of major concern. The trend suggests consumers may be purchasing blockbuster hits, but a smaller total number of titles for their 3DS handhelds. The units sold performance of Wii U titles did show an increase, yet the lack of consumer demand for Wii U hardware means that improvement cannot buoy and sustain Nintendo. Neither will the gamemaker’s foray into mobile content do much to better the situation. Miitomo seems very much like a Japanese market play that can leverage the popularity of the Animal Crossing franchise. We need many more details about gameplay mechanics before a fair judgment on its market potential can be offered. But as Nintendo’s rollout of mobile content appears rather leisurely, it is difficult to see how they can be the game changers the company needs. This all places huge pressure on Nintendo’s upcoming NX console to lift the firm’s fortunes.