Nintendo expects first annual loss in at least three decades
Spurned by consumers who now favor tablets, smartphones and higher-definition consoles,Nintendo Co.said it will probably post a loss in its current fiscal year — its first in at least three decades.
The Japanese video game company said Thursday that it expected to lose $839.4 million in the fiscal year that ends March 31 on $8.5 billion in revenue, 16.5% lower than it had projected in October.
The revised forecast was far worse than many had predicted. Analysts polled by Thomson One had projected the company to lose $293.1 million on revenue of $9.8 billion in its fiscal year that will end March 31.
It would be the first annual net loss since 1981, when Nintendo began disclosing its financial performance.
For the quarter that ended Dec. 31, Nintendo posted a $282.8-million gain on $4.4 billion in revenue. Analysts had forecast a $405.5-million profit on $4.8 billion in revenue.
Nintendo sustained declines across all its products. Hard-core gamers abandoned its Wii console for higher-definition machines, including Microsoft Corp.'s Xbox 360 and Sony Corp.'s PlayStation 3, which also playsBlu-ray movies. The company also lost many casual players, many of whom turned to free games on social networks and games on their mobile phones or tablets.
Sales of the Wii, which was once so popular that Nintendo had trouble manufacturing enough to meet demand, dropped by more than a third to 896,000 units from April 1 to Dec. 31, down from 1.37 million a year earlier.
Game sales for the Wii, on which Nintendo makes most of its profit, plunged 41% to 8.9 million copies, from just more than 15 million in 2010. Nintendo had similar declines in its line of hand-held DS consoles and games.
But the game is far from over for Nintendo. The company ended 2011 with a formidable war chest: $2.3 billion in cash and short-term investments. It’s also scheduled to begin selling its next-generation game console, the Wii U, in time for the holidays this year. Sporting a new controller and high-definition graphics, the new device is expected to be more competitive with the Xbox 360 and the PS3.
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