Nintendo makes drastic cut to forecast

Summary:The Japanese games company said it will post an operating loss of US$220 million for the year, instead of a profit of US$220 million in its previous estimate, due to lower-than-expected sales in the year-end sales season and the weaker yen.

The Japanese games company Nintendo has predicted it will post an operating loss for its financial year due to lower-than-expected sales.

nintendo-mario
Super Mario creator predicts operating loss for its financial year ended March 31, 2013.(Credit: Nintendo)

In a statement released Wednesday (PDF), Nintendo said it expected operating losses of 20 billion yen (US$220 million) for the year ended March 31, 2013, significantly down from its previous estimate of 20 billion yen in operating profit . The figure was also more drastic than market estimates of 12.1 billion yen (US$134 million) in profit, according to a Reuters poll of 19 analysts.

However, Nintendo raised its net profit forecast for its next financial year to 8 billion yen (US$88 million), up from 6 billion yen (US$66 million).

Nintendo said the earnings forecast was modified to reflect a weaker Japanese yen as well as lower-than-expected sales outlook based on the sales performance during the year-end sales season and afterward.

In the Reuters report, Nintendo president Satoru Iwata said: "The sales of Wii U were smooth at the beginning, but since the turn of the year they have been losing momentum.

"Due to delays in software development, we had to postpone sales of software products we had planned to [release] early this year, which is interrupting our sales," Iwata said.

In a ZDNet report in September, market watchers noted that the overall game console market in Asia had been challenged by the rise of online and mobile games, especially when console devices had created a high entry barrier for consumers.

Topics: Emerging Tech, Japan

About

The only journalist in the team without a Western name, Yun Qing hails from the mountainy Malaysian state, Sabah. She currently covers the hardware and networking beats, as well as everything else that falls into her lap, at ZDNet Asia. Her RSS feed includes tech news sites and most of the Cheezburger network. She is also a cheapskate mas... Full Bio

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.