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Nintendo hit by loss on sluggish game sales

Weak sales of its DS console and a dearth of hot new games trigger a net loss and lower revenue for Nintendo's first quarter.

Lance Whitney Contributing Writer
Lance Whitney is a freelance technology writer and trainer and a former IT professional. He's written for Time, CNET, PCMag, and several other publications. He's the author of two tech books--one on Windows and another on LinkedIn.
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Lance Whitney
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Nintendo reported its first quarterly loss in two years amid sluggish consumer demand and the effects of the rising yen.

Nintendo

For the first quarter, ended June 30, the gaming company took a net loss of 25.2 billion yen ($289 million), compared with a profit of 42.3 billion yen in the year-ago quarter. Sales dove 25.6 percent to 188.6 billion yen versus 253.4 billion yen in the prior year's first quarter.

Nintendo attributed the downfall to a variety of a factors.

For the quarter, the company sold only 3.15 million units of its DS game console, down from 6 million a year ago as fewer software titles squashed demand for the DS. Lower prices of the console in Japan and Europe also took a toll on revenue. Nintendo is looking for higher demand and better results when its new 3DS debuts later this year or early in 2011.

One bright spot was the Wii. Thanks to lower prices, the company's flagship console continued to enjoy rising sales as gamers scooped up 3.04 million units for the quarter, up from 2.2 million in the prior year's quarter.

But demand for the games themselves was not as bright. Though certain titles such as Pokemon Heart Gold Version and Tomodachi Collection did well, a lack of exciting new titles dampened overall software sales. For the quarter, Nintendo sold 22.4 million games for the DS, compared with 29 million a year ago, and 28 million for the Wii, versus 31 million in the prior year's first quarter.

Finally, the rise in the value of the yen and the accompanying fall in the euro and the dollar also hurt the company's sales and earnings overeas.

For the full fiscal year ending next March, Nintendo is looking to sell 18 million more Wii consoles and 30 million DS units, which includes sales of the upcoming 3DS. The company is also hoping to turn a profit of 200 billion yen, a decline of 12.5 percent from a year ago, on sales of 1.4 trillion yen.