Nintendo Posts Annual Loss for the First Time Ever - The UpStream

Nintendo Posts Annual Loss for the First Time Ever

posted Sunday Apr 29, 2012 by Nicholas DiMeo

Nintendo Posts Annual Loss for the First Time Ever

With the launch of the upcoming Wii U, Nintendo is hoping that this will help them recover from a couple of bad months of lackluster sales and 3DS price drops. However, bad news is still looming for Nintendo as they move into the E3 that will either make or break the company.

This week, for the first time in the history of Nintendo, they posted a net loss of $533 million. Wii sales haven't been very high as of late and has also caused them to post an operating loss of $460 million. This is very disheartening to learn about, as this is the same company that brought us the coveted Mario and Zelda franchises that we all know and love.

Has Nintendo seen its hey-day finally fade into the 8-bit darkness from which it emerged?

Nintendo did state that the losses were severe, due in part to the price cut of the 3DS and the release of the PlayStation Vita. Nintendo's previous strategy to use the profits from the videogame sales to offset the $70 price drop on the 3DS did not seem to pan out in favor for them.

To put this loss into perspective, last year Nintendo posted a nearly $1 billion profit. In their statement, Nintendo did say they are faithful that the Wii U will be successful, which to me sounds like the company is saying that if it does not do well, Nintendo may not be here next year. They will also hard sell their Nintendo Network, which will allow Wii U users to connect with 3DS users to play a select list of games.

To round out their financial posting, Nintendo's annual sales fell to $8 billion, below their forecast by about $100,000 and $300,000 below analyst's projections. Wii sales fell to 9.8 million consoles against 15 million sold the previous year. Through March 2013, they are forecasting Wii sales at 10.5 million, even with the launch of the Wii U. Nintendo is also forecasting a $247 million gain leading into their next fiscal year. We feel they may not know how much money that is.

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