Nintendo posts first annual loss on weak console sales

Nintendo posts first annual loss on weak console sales

Summary: Nintendo posts an annual operating loss caused by poor sales of its gaming consoles and a weak Japanese yen.

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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.

A year earlier, the Japanese company reported a 77.6 billion yen ($950m) profit.
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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3 comments
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  • Long overdue

    Nintendo has consistently relied on their loyal fanbase rather than the strength of their products. The Wii is nothing more than a rebadged Gamecube with some motion controllers. Thouroughly outclassed by the LAST generation consoles, let alone the new ones. It didn't even have a fancy Mode7-esque chipset advantage to fall back on. Nope, just pure underpowered, overpriced garbage. The appeal - instant, but the longevity limited.
    12312332123
    • Greatest Video Game Company Ever

      Nintendo is, has, and always be the greatest video game company of all-time. The Wii may not have appealed to you, or may be underpowered, etc., but its impact is undeniable. The proof was at E3 where both its competitors rolled out their versions of motion controllers - and for good reason. The Wii was outselling the Xbox 360 and the PS3 by a landslide for a very long time.

      So yeah, they may have posted a loss now but they've enjoyed profits for, well, decades. Nintendo makes money on their console sales; Microsoft and Sony don't.
      Bonesnap
  • Maybe they should put phones in the Gameboys?

    Then they could compete on a level playing field again. Just a thought...
    mlashinsky@...