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Nintendo reported an operating loss of 37.3 billion yen ($460.9 million USD)

Nintendo posted its first-ever annual loss today after a year of struggling with poor Wii and 3DS sales.

For the fiscal year ended March 31, Nintendo reported a net loss of 43.2 billion yen ($532.5 million USD) compared to the prior year, which generated a profit of 77.6 billion yen ($958.9 million USD).

Nintendo also took a 36.2 percent hit to its revenue compared to the year before. The most recent fiscal year ended with $647.6 billion yen ($8 billion USD) in revenue while the company managed to generate over 1 trillion yen the year ending March 31, 2011.

In addition, Nintendo reported an operating loss of 37.3 billion yen ($460.9 million USD), which was only slightly better than the predicted 41.4 billion yen loss for the year ended March 31, 2012.

Nintendo can place most of the blame on poor Wii, DS and 3DS sales over the past year. For the fiscal year ended March 31, 2011, Nintendo sold 15 million Wii consoles. This number dropped to 9.84 million the most recent fiscal year. The Wii took a hit in the software department as well, with 102.3 million software titles sold compared to the previous year's 171 million.

As far as portable gaming goes, Nintendo DS sales dropped considerably from 17.5 million sold in the fiscal year ended March 2011 to 5.1 million sold in the most recent fiscal year. The 3DS, on the other hand, sold very well with 13.5 million sales. However, Nintendo was forced to slash the price last year, meaning each unit was sold at a loss.

The 3DS was released in March 2011 for $249.99. After Nintendo reported a net loss of 25.5 billion yen ($324 million USD) in the quarter ending June 30, 2011 and also realized that it had only sold 4.32 million 3DS units (830,000 in the U.S. total) since launch, the company decided to slash the price of the 3DS to $169.99. The price change was effective August 12, 2011.

Nintendo President Satoru Iwata blamed poor 3DS sales not just on price alone, but also a poor launch lineup of software titles.

"We also must reflect on the fact that we were not able to launch Nintendo 3DS at a time when a sufficient number of strong software titles were ready," said Iwata at the time.

Many say that new devices, such as smartphones and tablets made by tech giants like Apple (iOS devices like iPhone and iPad) and Google (Android operating system), have placed a competitive burden on Nintendo.

While the situation looks pretty bad for Nintendo right now, the Japanese gaming company has a plan to turn it all around. According to Nintendo, it will stop selling the 3DS below cost by the middle of the fiscal year ending March 31, 2013, and it will also launch more titles, such as a side-scrolling 2D "New Super Mario Bros. 2" game as well as the latest version of "Animal Crossing."

Nintendo is also hoping that the new Wii U console will save the sinking gaming company for the year ending March 2013.

"Nintendo will release the Wii U, the successor of the Wii, mainly in Japan, the United States and Europe at the end of this calendar year, and propose a new play style of home entertainment with its unique controller embedding a 6.2 inch touch screen," said Nintendo's latest financial report.

Nintendo's outlook for the fiscal year ending March 31, 2013 consists of net sales of 820 billion yen ($10.1 billion USD), an operating income of 35 billion yen ($432.5 million USD), an ordinary income of 35 billion yen, and a net income of 20 billion yen ($247.1 million USD). Also, Nintendo plans to sell 18.5 million 3DS units and 10.5 million Wii consoles this year.

Sources: Reuters, Nintendo

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The 3DS is the problem.
By zero2dash on 4/26/2012 1:46:27 PM , Rating: 2
3D is still a fad, the 3DS still costs $100 more than it should, and Nintendo is still relying on churning out the same stuff they've released to the nth degree time and time again on every other console of theirs.

Sorry - it's about time they take some losses and get knocked off their high horse. Nintendo fans are the new Apple fans. All hail the mighty Iwata! He can do no wrong!

....'cept this time, he did. And they're kidding themselves if they think a "marginally better than the current gen consoles" Wii U is going to sell to the soccer moms and old folks homes that bought the Wii up in droves. Those people will continue holding onto their Wii systems, and the "core gamers" that Nintendo claims to care about are going to buy the new Xbox and Playstation systems once those come out because they will blow away the Wii U and Nintendo will (as usual) have the weakest hardware available, only this time the motion controls won't be a 'new' thing.

RE: The 3DS is the problem.
By cscpianoman on 4/26/2012 8:49:57 PM , Rating: 2
I see a lot of bias in these comments. First off, the Wii was release Dec 2006 and since has sold 100 million consoles. In Nintendo's longstanding history the NES sold 61 million, the SNES sold 49 million and the Gamecube only sold 20 million. The Wii by all accounts and purposes sold like a firestorm. It is now in it's 6th year and "OMG!" "Gasp!" "surprise!" sales are petering out. It would appear, this holiday season would be an ideal time for a new release.

This is the first time nintendo has ever posted an annual loss. However, considering all the years of profit Nintendo is still sitting on a rather large war chest of 407,186 million yen or essentially $5 billion dollars and that is coming from the current financials.

Don't count Nintendo out yet.

RE: The 3DS is the problem.
By cscpianoman on 4/26/2012 8:53:07 PM , Rating: 2
BTW to put the war chest in perspective Apple has 10 billion in cash reserves.

RE: The 3DS is the problem.
By sorry dog on 5/5/2012 1:45:36 PM , Rating: 2
Now there's an idea...they could go all apple and use that money to sue everybody making game console because they probably have the patent on all non-joystick controllers... at least that's what Jobbies would do.

"My sex life is pretty good" -- Steve Jobs' random musings during the 2010 D8 conference

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