Nintendo reports first annual loss thanks to 3DS and small Wii-demand

[shadowDOESrock]

Nintendo today announced its first annual operating loss since 1981.  The number:  ~ $460 million.

Nintendo said a number of factors were to blame, including a dropoff in Wii demand and the August 3DS price drop, which forced the company to sell the handheld at a loss.

There's also the impact of Apple Inc. and its portable touchscreen devices.  The company has disrupted more than a few businesses in the past few years during its rise to global power.

Nintendo expected to sell 13 million Wiis but only sold 9.8 million; it expected to sell 16 million 3DS' but only sold 13.5 million; it expected to sell 11 million DS' but only sold half that many.

Software sales were also down about 35%.

So how does Nintendo plan to right the ship?

The Nintendo Network is one area the company plans to build around.  And falling costs of the 3DS hardware should make the system profitable sooner than later.  Then there's the upcoming Holiday release of the Wii U console, which should give Nintendo a head start on Sony and Microsoft in the next round of combat for the living room... though the living room would seem to be a shrinking market with regard to gaming.

An excerpt from a Reuters piece on the subject:

Nintendo faces a fundamental shift in gaming habits that analysts argue may require it to shrink its hardware business and instead chase profits for Super Mario and other game titles on devices built by other firms.

Its emerging foe is Apple, already the nemesis of flagging Japanese titan Sony Corp, whose seamless go-anywhere devices – the iPhone, iPad and rumored plans for a games controller and "iTV" – are positioning it to grab swathes of the gaming market where Nintendo once held sway.

In a report this month, gaming site MocoSpace asked 15,000 gamers where they gamed; 53 percent said they played in bed, 41 percent in the living room, 72 percent commuting and 5 percent on the toilet.

Yet a game started on a Wii can't be continued on a DS on the way to work or school. The Wii U, slated to go on sale in time for the year-end shopping season, does not address that convergence hurdle.

Nintendo will have to sell the new console for as much as $350 to break even, estimates Nanako Imazu, an analyst for CLSA in Tokyo. That is $100 more than it charged for the Wii in 2006 and would outstrip both the Playstation 3 and Xbox 360, which can be picked up for less than $300.

On the bright side of things, Nintendo is sitting on a mountain of cash and expects to turn a profit in the upcoming fiscal year of about $430 million thanks to the upcomming Wii U.

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Considering Sony & Microsoft are making a fuckton of losses with their consoles aswell currently....

I think we are facing another videogame-crash.

[jkid101094]

I blame Indie games. *shot*

But seriously...If the Big N goes under I won't have a reason to keep going down this career path.

[Jordan teh Echidna]

If Nintendo dies, i will have no purpose in life...

[Elija2]

If Nintendo dies, I guess I'll get a Playstation maybe...

[Supersonic196]

I blame Indie games. *shot*

I blame jkid.

If nintendo goes under, I might buy a playstation to play Sonic games... :I

[Jordan teh Echidna]

Me going to Xbox or Playstation would be the equivalent to me becoming a crackhead.

I would betray myself >:U

[Hakudamashi]

I predict the 2nd coming of the Video Game Crash

Time for gaming to get a reboot

[TheGameNinja]

Nintendo can more than handle one year's loss. I wouldn't say it spells doom for the industry because of it. I'm more surprised the Wii's sales didn't stagnate a little faster. 3DS sales will probably pick up more this year and the Wii U will help. Then again, if the Wii U hits the same problem the 3DS did price-wise, they may be facing a similar situation next year too.

[Tanassy]

Even if it is a small loss in Nintendo's big pile of moolah, this is definitely a sign.

The 8th Generation will most likely spell the end of Gaming as we currently know it, bringing about changes for the inevitable 're-boot', as wind put it. If not meaning the end, I reckon that the 8th Gen will at the least, sell about half as many systems as the 7th..
That is unless these new consoles manage to keep up with the rise in mobile technology- which is highly unlikely.

[Hakudamashi]

That is unless these new consoles manage to keep up with the rise in mobile technology- which is highly unlikely.

With the whole online is required all the time, war against used games, online pass, DLC, and all these things