Nintendo Posts Huge Loss of $575M

Nintendo logoNintendo has posted its latest earnings reports and the company has announced a larger than anticipated loss for the year. This loss represents the first loss for Nintendo at the operating level. Part of the loss is chalked up to the strong yen making investments and money earned in other parts of the world worth less.

Nintendo is also fighting the continuing defection of gamers from traditional portable consoles like the 3Ds and DSi to the iPhone and other touchscreen devices. Nintendo is also seeing demand for its Wii home gaming console wane.

"To say that (the days of consoles) are over is likely an overstatement, but social network and Internet delivered games are growing and structurally changing the future of the industry, which is a strong wind against Nintendo," said Shigeo Sugawara, senior investment manager at SompoJapan Nipponkoa Asset Management.

Nintendo is expecting an operating loss of $575 million working out to 45 billion yen. Analysts had expected Nintendo to rack up a much smaller loss of only 4.2 billion yen. Nintendo has also cut the forecast for Wii sales from the previous 12 million units to 10 million and the 3DS handheld console sales forecast has been chopped form 16 million to 14 million.

Nintendo President Satoru Iwata said, "We had higher expectations for the year-end season, but failed to meet them."

To help drum up some confidence in Nintendo, Iwata did announce that the new Wii U would be launching in the U.S., Japan, and Europe in time for the holidays season of 2012. Nintendo saw profits for the October to December holiday shopping quarter fall to 40.8 billion yen compared to the expected 52 billion yen.

Nintendo stock continues to fall in price with the stock trading below 11,000 yen thanks to weak sales. When Nintendo was at its highest the stock was trading for 73,200 yen per share. Things are so bad that some analysts are now thinking that the days of the home game console are over.

Source: DailyTech

Tags: Nintendo

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