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JAPANESE VIDEOGAME GIANT Nintendo on Wednesday posted a €72.3 million quarterly net loss, with higher costs tied to sales of its Wii U console digging into its bottom line while sales weakened.
The shortfall comes after the firm logged its third straight year of operating losses, underscoring the challenges faced by the one-time industry titan.
The maker of the Super Mario and Pokémon franchises has fallen on hard times in recent years, piling up losses as rivals Sony and Microsoft outpaced it in console sales.
All three companies are also fighting off a trend toward cheap – or sometimes free – downloadable games for smartphones and other mobile devices.
On Wednesday, Kyoto-based Nintendo said its net loss for the three months through June came in at 9.92 billion yen (€72.3 million) on sales of 74.70 billion yen (€545 million), down 8.4% from a year earlier
Nintendo said it sold 510,000 Wii U consoles globally in the quarter, well up from 160,000 units in the same quarter last year.
The boost was largely thanks to the launch of the newest installment of its popular racing game, “Mario Kart 8″, which sold 2.82 million units in the quarter, it said.
“‘Mario Kart 8′, with a good start in sales, has contributed to a gain in momentum for the Wii U platform business,” the company said.
But the company suffered an operating loss as marketing and other expenses dragged it into the red, it said.
Unchanged forecast
Lacklustre demand for the unit saw the firm move 2.72 million units globally during the past fiscal year, less than a third of its earlier prediction for nine million and dealing a blow to hopes it would match the blockbuster success of the original Wii.
“Nintendo can’t expect much from the Wii U since its performance has failed to match company forecasts,” said Hideki Yasuda, an analyst at Ace Research Institute in Tokyo. “The Christmas and year-end sales season is going to be crucial.”
Despite the weak earnings, Nintendo left unchanged its forecast for a 20 billion yen (€145 million) net profit on sales of 590 billion yen (€430 million) for the year to March 2015.
“For the year-end sales season, which is the biggest sales season of the year, we expect to expand sales by releasing key titles and launching new products,” it said.
Nintendo scratched its way back to net profit in fiscal 2012 thanks to a sharply weaker yen, which inflates Japanese firms’ repatriated profits.
But the company booked a net loss in its latest fiscal year, as dismal sales of its Wii U console during the crucial Christmas holiday period dented results.
In January, company president Satoru Iwata said he would slash his salary in half for five months to atone for the downturn.
Among the key criticisms levelled at Nintendo has been its long-standing refusal to license some of its iconic brands for use on mobile applications.
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If Nintendo were to lose $250 Million every year, they’d still be afloat in 2052 thanks to all the cash they’ve banked over the last 30 years.
Surely if they were to lose that much year after year they’d be better off investing that pile of cash in some other business?
Who ever gets the Cculus Rift integrated first will win the gaming industry
If they would just license the Pokemon franchise so a big third party developer like Bethesda could make a AAA game like Skyrim ala Pokemon, I would bet that it would break all kinds of sales records
That is the dream.
Unlikely to happen though as they don’t want to alienate their younger playerbase. If they keep losing financially however, they might consider it, one would hope .
thankfully it will never happen , it’s a major project that I would live to see Nintendo tackle but not a 3rd party , bethesda would be a top 3 choice but too much money to be made keeping it in house
Pokemon X/Y was the biggest selling game of 2013 in Japan, and Japanese gamers still do not care for Western RPGs. I think the future of Pokemon will remain handheld and turn-based.
Think they’ve milked enough from mario at this stage
The Wii had 3 main series Mario games, 1 2D platformer and 2 3D platformers (both of exceptional quality). For comparison the PS3 and 360 had 6 Assassins Creeds, 9 Call of Duties, 3 Uncharteds, 4 Gears of Wars, 5 Halos (not including spins offs), 4 Forzas and 8 FIFAs
Also worth noting that the Wii is an exception in this regard, the Gamecube had 1 (Mario Sunshine) the N64 had 1 (Mario 64) and the SNES had 1 (Super Mario World)
And Sony are set to go bankrupt soon enough with losses close to a billion predicted
Also many would say Nintendo have the brighter future over the next year or so with some big releases
Not all of Sony is in trouble. It was the part that foes laptops that list all of the money. Playstation is going nowhere.
Well I think the Wii U will challenge the Xbox One and PS4 as the top next-gen console due to the games that Nintendo are releasing this year so I think that this is a very minimal loss for Nintendo, especially considering how much money they actually have saved up over the years as well.
my eldest is going on 10 and has had a Wii like most of his friends for the last few years. I get the impression though that they see the Wii brand it as a younger kids machine and will want one of the other 2 in the next year or so
Games for the Ds and Wii (good quality ones like Mario etc) never seem to go down in price much, even after a year or two of release. Good quality games on the PS3 and Xbox can be picked up for 10 or 20 within a relatively short time.
One of the things that annoyed me about nintendo (whom I’ve always been quite loyal to) is their rewards system. I owned an Wii and Ds for years and regularly bought games, you could never accumulate enough stars to buy anything off their rewards scheme. I mean you’d have to physically rob all the rewards cards in the shop store room to be able to afford anything from it. I’m was an adult with some disposable who should probably not have been buying so many games, no kid would have a chance!
@Dee4 yeah my point was kinda like the Wii U has gotten to the stage where the Wii doesn’t seem as much focused towards younger children anymore, this coming from a 15 year old who is most likely getting a Wii U instead of a PS4 this Christmas due to the quality of the games.
Now if only Nintendo made a console for grown-ups, could be there saving grace.
PlayStation is winning this gen, it’s more powerful than Xbox One and cheaper.
Also PS gamers buy more games for their console than rival consoles.
Sony laptops and tv’s might be losing/lost money but the PlayStation is doing fine.
Well if you have the number 8 after a game then only the die hard fans will buy it. Nintendo seriously need to come up with some new ideas or they will just be forgotten about in 10-20 years time
Their games would sell on iOS and Android platforms seems crazy given that most consumers are playing games on smartphones and tablets !
Like movies, people don’t buy games anymore. They just download and hack them.
Nintendo lost a huge fan base limiting their consoles and not keeping up with the rest. Sure the wii was hugely enjoyable for about a year but after that it got terrible. Taking blood and gore out of resident evil was when I finished with them. I know they wanted to go a different direction but that can only go so far ..with dx10/11 games out the last few years on PC and console, gaming PC/laptops, the ps4 and Xbox one are all competing for the top spot…they’ve left their fans aside to produce stuff for kids..it’ll take a lot of work to get some of that fan base back
The Wii had No More Heros, Red Steel (admittedly crap), Mad World, Xenoblade Chronices and Sin and Punishment. All games aimed at an older audience, nobody bought them.
I recently came across a series of YouTube videos called “Did you know gaming”, one of the videos highlights the architecture of the SNES, looking back there was some fantastic stuff done to bring us games like Starwing (Starfox in the US)
the amiibo’s there going to release look very interesting. and no need to buy portals too so savings in hardware for the end user
have your say