Nintendo Posts First Annual Loss in Decades
Nintendo lost 43.2 billion yen ($533 million) in the latest fiscal year as revenue fell 36 percent on weaker demand and price cuts for its Wii and portable 3DS consoles.
TOKYO - Nintendo lost 43.2 billion yen ($533 million) in the fiscal year ended March 31, its first loss in over 30 years as revenue fell 36 percent on weaker demand and price cuts for its Wii and portable 3DS consoles.
Annual sales were down to 647.65 billion yen from over 1 trillion yen ($12.5 billion) the previous year.
Earnings at the company, which makes around 80 percent of its revenue overseas, were also hit by the strong yen, making its foreign currency holdings worth less when brought back to Japan.
The 3DS portable console, which allows 3D game-play without special glasses, was launched in February 2011 in Japan and the following month in Europe and the US. However, sales failed to live up to expectations, and the company slashed its price by around 40 percent worldwide last summer, meaning it was losing money on each console sold.
As well as battling with Japanese rival Sony, which has also faced disappointing sales for its PSP Vita portable console and announced record losses this month, Nintendo is competing with the shift in gaming to smartphones and tablets.
Apple, maker of the iPhone and iPad which are being increasingly targeted by game developers, this week posted earnings of $11.6 billion for the last quarter alone.
Kyoto-based Nintendo, which started life as a maker of gambling game cards, is forecasting a return to operating profits of 35 billion yen ($431.5 million) for the current financial year to March 2013.