TOKYO – Video game giant Nintendo issued a profit warning on Friday, forecasting an operating loss of $335 million (35 billion yen) for its full fiscal year.
It cited weak console sales over the key holiday season. The Kyoto-based company had previously predicted an operating profit of $96 million (100 billion yen) for the financial year ending in March.
It would be the third straight year of losses for Nintendo, which before that had never been in the red since going public.
The Wii U console has consistently failed to hit sales targets since it was released though, and the recent holiday season proved another disappointment.
"Sales in the U.S. and European markets, in which we entered the year-end sales season with a hardware markdown, were significantly lower than our original forecasts, with both hardware and software sales experiencing a huge gap from their targets,” said Nintendo president Satoru Iwata.
Nintendo cut its forecast for global Wii U sales by more than two-thirds, from nine million to 2.8 million consoles.
The company's portable 3DS console has also underperformed, except in Japan, and Nintendo cut its sales forecast by a quarter to 13.5 million units.
In sharp contrast, Sony's PlayStation 4, launched in November, has beaten expectations, already shifting 4.2 million units before it goes on sale in Japan next month. Microsoft's Xbox One has sold around three million units.
While rivals Sony and Microsoft have also been affected by the growth of gaming on smartphones and tablets, it was the casual players who Nintendo had attracted with its Wii console that seemingly have been easiest to lure away from expensive, dedicated consoles.
Hit franchises such as Mario Bros. boosted profitability in the past, but the company has been criticized by analysts for refusing to license the games for other devices.
Nintendo's stock closed down 2.75 percent on Friday at $140 (14,645 yen) before the profit warning was issued.