Thursday April 26 08:15 pm
Nintendo Posts First Ever Annual Operating Loss on Poor Wii and 3DS Sales
Nintendo Co Ltd posted its first annual operating loss on Thursday (April 26) on shrinking sales of its ageing Wii gaming console and weak demand for its new 3DS handheld device. However, it said it will return to profit this year helped by a weakening yen. For the current financial year to March 31, Nintendo reported an operating loss of 37.3 billion yen (459 million US dollars) compared with a consensus estimate of a 41.4 billion (510 million US dollars) yen loss, based on forecasts by 20 analysts surveyed by Thomson Reuters I/B/E/S. For the year starting April 1, Nintendo predicted operating profit of 35 billion yen (423 million US dollars), compared with a consensus estimate of a 40 billion yen profit, based on forecasts by 20 analysts surveyed by Thomson Reuters I/B/E/S. Projected profit, nonetheless, is far below the levels seen during the gaming boom sparked by the launch of its Wii console in 2006. The company said it expected to sell 18.5 million 3DS devices worldwide, up from 13.5 million in the business year just ended. It said sales of the DS would shrink to 2.5 million from 5.1 million, with the Wii edging up to 10.5 million from 9.8 million. The company, which began in 1889 making playing cards in the back streets of Kyoto, has been hammered by a precipitous drop-off in sales of its Wii, DS handheld console and its new 3DSversion. Promising to return his company to profit this business term, Nintendo's boss, Satoru Iwata, blamed dismal sales on a strong yen and economic gloom in Europe. Weak demand for the new 3DS, launched in February 2011, forced Nintendo to slash the price of the gadget by about a third in August and trim its initial estimates for sales during the business year by 8 million units. Nintendo is expected to release its successor to the Wii, the Wii U, later this year.