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Nintendo profit dives, Wii U to the rescue late 2012?

updated 05:20 am EST, Thu January 26, 2012

Nintendo to report first annual loss in late March

Nintendo's quarterly earnings report out today (pdf) shows that company's fourth quarter profit, normally a strong suit, collapsed by 61 percent compared to the same period in 2010. The company is now well on track to report a larger than expected annual loss, marking the first time it will have been in the red. Part of the gaming giant's fortunes will rest on its Wii sequel, the Wii U, which Nintendo President Satoru Iwata said will reach the US and other key markets for the crucial holiday season 2012.

In the wake of the steep price cut of the Nintendo 3DS, the company reports that it has now sold in excess of 15 million since its launch. Nintendo also noted that three 3DS titles each sold in excess of 1 million units, including Super Mario3D Land and Mario Kart 7, with a third-party also reaching the milestone. The aging Wii console shipped 8.96 million units for the quarter. However, any positive news was tempered, Nintendo says, by the lost profit in slashing the 3DS price and the strong value of the yen.

Following the sharp downturn in profit over the holiday quarter, Nintendo now expects that it will now turn into an operating loss of approximately $835 million for the fiscal year. The result is the second consecutive disastrous quarter for the Japanese company, which is struggling to compete with the rise of the iPod touch, the iPhone, iPad and Android devices as casual mobile gaming platforms. In October last year, the company netted a $932 million loss for the six-month period ending September 30. While it has stemmed the flow somewhat with the 3DS sales bouncing back after its price cut, the company is still hemorrhaging money.

With the Wii U still at least 9 or 10 months away, there appears to be little respite in sight for legendary gaming house. Nintendo has repeatedly stated that gaming is at its core, as are dedicated gaming devices. However, that strategy backfired with the Wii ultimately. After the novelty of its then unique motion control system wore off, its console remained unable to even offer the possibility of playing DVD movies. Although it has added entertainment options including Netflix, it has not been able to match the overall capabilities of the PS3 and Xbox 360. [via Reuters]

by MacNN Staff



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