Nintendo loses $1.3B in six months, report says

The game company will reportedly show tomorrow that it lost 100 billion yen ($1.3 billion) during the six-month period ended September 30.

Daniel Terdiman/CNET

The last six months may have been much worse for Nintendo than the company has previously admitted. According to Japan's Nihon Keizai Shimbun--as related by Reuters, Nintendo will show a fiscal first-half loss of 100 billion yen ($1.3 billion) when it announces its earnings tomorrow.

Earlier this year, the company said it expected to post a loss of 55 billion yen during the six-month period ended September 30. If the Nikkei report is accurate, it would mean that the company has somehow managed to lose almost $1 billion in the past three months alone.

In April, the game company announced that its profit for the fiscal year ended March 31 hit $946.7 million, down 66 percent compared to its last fiscal year. In July, Nintendo said that it lost $328.3 million in the fiscal first-quarter ended June 30.

At this point, Nintendo's troubles are legion. The company's aging Wii platform, while still the bestselling console of this generation, has seen its appeal wane. Nintendo has already announced a follow-up, called the Wii U--but it won't launch until next year.

When the Wii U does launch, it faces a longevity issue. The console is only expected to deliver graphics that can match the Xbox 360 and PlayStation 3, both of which have been around for five years or more. Recent reports suggest that new consoles from Microsoft and Sony could launch in 2013 or 2014, meaning they may simply blow the Wii U out of the water in graphics quality.

In the mobile space, things are even worse for Nintendo. The company's 3DS, which lets users play 3D games without the need for special glasses, has failed to catch fire. In fact, during Nintendo's fiscal first quarter, the company sold just 710,000 3DS units worldwide, including 110,000 in the U.S. Nintendo dropped the price of the 3DS to $169.99 from its initial price of $249.99, but so far, it hasn't even come close to matching the unit sales its predecessor, the DS, tallied at the same point in its lifecycle.

Nintendo's issues are also economic. As a Japanese company, Nintendo is now suffering from the strength of the yen, which makes Japanese exports more expensive. In fact, the company incurred a 40 billion yen currency exchange loss over the last six months because of the strength of the yen against the dollar and euro, Reuters is reporting, citing the Nikkei.

 

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