Nintendo posts first annual loss on weak console sales

Nintendo, maker of the Wii and 3DS consoles, said it expects to return to profit this year after the company posted its first annual operating loss in three decades.

Poor sales of its games consoles are behind the 43.2 billion yen ($530m) net loss.

Weak demand for its handheld 3DS console, despite the price being cut by up to 40 percent in August, and booming demand for smartphone-enabled games saw the company lose out on hitting its forecast.

Nintendo's Wii has failed to gain traction in the past financial year, which ended March 31, with rival gaming consoles from Microsoft and Sony faring better in the gaming space.

The yen also contributed to the company's earnings as the company keeps vast sums of its cash offshore.

The company said Nintendo's gaming products had been in decline since 2008, forcing it to revise its net sales estimates for the 2011 fiscal year. Nintendo revised its forecast down further in January, as it also cut its target sales of consoles by 3 million Wii consoles to 10 million, and 2 million 3DS consoles to 14 million.

Nintendo said today it sold 9.84 million Wii consoles and 13.5 million Nintendo 3DS consoles in the 2011 fiscal year. Nintendo DS series hardware brought in 5.1 million sales.

The gaming giant is expected to release the next-generation Wii U in the fourth quarter of 2012 in time for the Christmas holiday season.

Image credit: CNET.

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