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Nintendo on downward spiral as Wii sales fall off a cliff

The company reports that its revenue was down nearly 10 percent year over year and that it incurred yet another loss.

Nintendo's current devices and their sales.
Nintendo's current devices and their sales.
Screenshot by Don Reisinger/CNET

Nintendo's financial troubles just keep coming.

The venerable game maker announced (PDF) today that it generated 84.8 billion yen (about $1.08 billion) in revenue during the three-month period ended June 30, representing a 9.7 percent decline from the 93.9 billion yen it secured in sales during the same period last year. The company was forced to incur a net loss of 17.2 billion yen ($220 million), which, while disconcerting, was actually better than the 25.5 billion yen figure from last year.

Nintendo's financial position becomes even more concerning when one considers its past performance. During the same period in 2008, Nintendo posted net sales of 423.4 billion yen and a profit of 107.3 billion yen. Now, it's losing boatloads of cash and its sales are about one-fifth of what they were just four years ago.

The company's troubles can be directly tied to declining hardware sales. During the three-month period, Nintendo sold only 710,000 Wii units worldwide, including 60,000 in Japan and 210,000 in the Americas. Last year, its sales hit 1.6 million.

Nintendo's 3DS sales weren't all that impressive, either. According to the company, it sold 920,000 3DS units in Japan during the quarter and 420,000 in the Americas.

But Nintendo has a plan in place to address that problem. The company is currently planning to launch the 3DS XL, a larger version of its current 3D handheld, next month in the U.S. In addition, Nintendo has unveiled the Wii U console, which is expected to be available later this year.

The Wii U and 3DS XL should jump-start Nintendo's ailing business in the short term, but its long-term prospects are decidedly up for grabs. Microsoft and Sony are expected to launch their own new consoles in 2013 or 2014, potentially putting the Wii U on the backburner in consumers' minds. And with gaming handhelds losing their luster as smartphones and tablets take their place, Nintendo's future mobile prospects might be not be so great.

Still, Nintendo has had quite a run over the last few years. The company revealed today that it has sold over 96 million Wii units worldwide since its launch, accounting for more sales than the Nintendo Entertainment System and Nintendo 64 combined. The 3DS' predecessor, the DS, has tallied 152 million unit sales, easily beating the original Game Boy's 118 million units.