Nintendo sees first annual loss, cuts 3DS forecast; devices continue to lose ground to iPhone, iPod touch

“Nintendo Co Ltd posted a sharp drop in quarterly profit and forecast a bigger-than-expected full-year loss, its first at an operating level, as it battles a strong yen and its games devices lose ground to gadgets such as Apple’s iPhone,” Yoshiyuki Osada and Isabel Reynolds report for Reuters.

“Nintendo now expects an annual operating loss of 45 billion yen ($575 million), dwarfing expectations of a 4.2 billion yen loss, based on the average of 21 analyst forecasts,” Osada and Reynolds report. “Nintendo cut its forecast for annual sales of its ageing Wii console to 10 million devices from 12 million, and for the 3DS handheld games device to 14 million from 16 million.”

Osada and Reynolds report, “The company plans to launch the Wii’s successor, the Wii U, in Japan, the United States, Europe and Australia in the year-end season, Iwata told reporters. But with cloud-based gaming emerging as a potential threat, Nintendo may have trouble generating excitement about its new product, some analysts say… Apple is thought to be preparing a new iPad and possibly a smart TV that could be game-changers for the industry. ‘We think we need to consider the possibility that home consoles could become a thing of the past,’ Citigroup analyst Soichiro Fukuda wrote in a recent report. ‘We think the direction taken by marketing trendsetter Apple will be very important and we will be watching the company’s announcements at future events with interest.'”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

Related article:
What Apple should do with some of their huge cash pile: Buy Nintendo – January 23, 2012


  1. I take back what I said in a previous post, it looks like Nintendo will be Beleaguered III; not M$. M$ will have a larger roman numeral after Beleaguered. The companies are falling rapidly now.

    Hey BLN-Maybe iPod should have a 5″ screen!?

  2. It is clear that iOS (and, to certain extent, even Android) are much more convenient platforms for casual gaming than a dedicated portable console. Regardless of Nintendo’s exclusive game titles (the notorious ‘Mario’ franchise), the persistent availability and convenience of phones just trumps whatever lure that famous ‘Mario’ series might present.

    With a possible exception of that fringe of extremely dedicated console gamers, portable gaming has little chance of surviving as a dedicated hardware.

    As for the home consoles, picture is somewhat different there, when we have Microsoft sinking truckloads upon truckloads of money into a barely-breaking-even Xbox business in order to prop up their Xbox-centered ecosystem, which will certainly help sustain the industry, if only artificially. But even there, we have Apple and the iPad encroaching on it, with the AirPlay (ability to see the game on a TV screen). There are fewer and fewer reasons to actually buy a real console today.

    Nintendo’s future is very far from clear.

  3. At some point Nintendo is going to have to swallow their pride and begin making games for iOS, or at the very least, license out some of their franchises. I would think they would want to retain total control of the games, so developing them directly would make more sense. I’m certain that Nintendo produced games on iOS would be wildly profitable for them.

    Mobile gaming will soon be almost solely done on phones/tablets (read: iPhones and iPads). If I always have my iPhone with me, there is no need to be lugging around another device. Also, with the iOS devices only getting more and more powerful, the gap between the dedicated handhelds and iOS devices is gone (with the exception of gimmicks like the “3D” on the 3DS) .

    Nintendo should continue to focus its hardware efforts on the home consoles – the Wii somehow still continues to sell well.

  4. I simply don’t see how Nintendo will compete.
    1. iPad 2s already have the option to sling HD/independent graphics to your AppleTV
    2. iPad 3s will have absolutely killer graphics
    3. I’m willing to bet that the next iPod touch will have a 4 inch screen like the next iPhone–along with the AirPlay HD graphics option.

    All those taken together with the mammoth sales of iDevices and apps/games are very, very bad news for any other portable gaming system and could even put a dent in console gaming.

    1. It doesn’t make sense for nintendo to drop software on their 3DS system to develop for iOS

      Nintendo Shipped around 2-3 million copies of the new 3DS mario game. at $40 a pop, that’s 80-120 million in sales, and the game just came out.

      Look at their other software from the previous gen (new super mario bros and mario kart ds). have shipped around 50 MILLION copies, most at 34.99.

      NO WAY would they be able to sell enough copies of those games at .99-4.99 to make a fraction of that type of revenue. On top of that, they still make a good amount of money on the hardware.

      1. Yeah, But people are going to stop buying their hardware and buy iPads and iPod Touches instead so they will have no sales – I would think that they need to get on the mobile train soon or we will just play the copycat games on the iPad – I bet Angry Birds makes more mine than those 3DS games.

      2. Ok, but considering that they just had their first ever operating loss, I’m not sure that one could possibly say that their current model is till working. Even with the numbers that stated, they LOSS money.

        Look at what’s happening. The sales of their hardware was slower than they expected, so they had to slash the prices. They’re cutting their hardware sales projections by the millions.

        They are going to have to do something.

        I don’t think it would make sense for them to develop exclusively for iOS (yet), but it would certainly provide them with a huge number of potential customers.

        And with regards to pricing, many top tier AAA titles (which Nintendo titles would instantly be seen as by fans) routinely sell for more than $4.99. I don’t think anyone expects Nintendo to start selling a bunch of .99 Mario games.

  5. Nintendo need to EMBRACE change rather than fight it like Kodak did. Their bankrupt now.

    If ANYONE from Nintendo is reading this, then this is your only chance to make a profit.

    Release your casual games on to ios and maybe make a 3rd party addon (optional) that will allow an ipod or iPhone to slip into that has a thumb stick and your A and B buttons. You will make an absolute killing. While your at it, make sure you support the “icade” joystick.

    Your Nintendo wii is fine but forget crappy little DS consoles, no one will buy these one use machines anymore, and certainly won’t pay $60 per game. That’s why I hacked my DS and got all the game roms for nothing.

    Release on to ios where it’s proven iOS users actually BUY software (I haven’t pirated a single app in 3 years).

    If you REFUSE to follow these suggestions, then good bye. You will be going into liquidation so fast you won’t get a chance to make a Wii 2.

    1. They already made a Wii 2, and it’s coming this year.

      They won’t be going bankrupt any time soon. They have enough money to live with losses like these for more than 10 years, and they have zero debt on top of that so they won’t have any trouble borrowing money if they ever need to.

      3DS is in a great position and is selling very well. Unless something goes horribly wrong, they’ll return to being profitable by the end of next year. Also, this article is wrong. The strong yen is what’s hurting them.

  6. Nintendo has billions in the bank, but they just don’t have the software engineering talent to compete with Apple. This is why the DS and Wii have such lame OSes. Their hardware lately has been uninspired as well. The 3DS is a gimmick, and the Wii U looks like a lame attempt at competing with the iPad.

  7. Well, I stand corrected. The way the world is evolving is appear fly impacting Nintendo’s performance. However, I would not turn to developing for iOS or android just yet. Let’s save that for plan B. One posible factor tha caused this (that I see and believe) can be pin pointed by looking how each company’s product evolved over the years.

    When the original Nintendo DS launched in 2006, how much different was it from the Game Boy?
    (a) It offered a touchscreen which opened a entirely different experience.
    (b) it offered two screens making certain games more interesting.

    So, it was a hit because it was a new experience. But, it was targeted for gamers alone.

    Look at the consoles that proceeded it. How different was it from the original? The lite improved the brightness, DSI added a camera (with horrible quality), the DSI XL was just a larger version of the same DSI, and the 3DS just added 3D graphics. Did you see any major change in experience over the years? (3D was technically a new experience but was not perfected)

    Now, let’s look at Apple, starting with the iPhone! The original was technically a hybrid consisting of a phone, a web browser and an iPod(mp3). The 3G added 3G capabilities and an app store which consists of various apps ranging from utilities to games. The 3GS improved speed and added voice control. The 4 took a major leap and nc lauded FaceTime, multitasking, etc. and finally, the 4S improved performance and introduced Siri.

    When the iPad launched, it offered similar things that the iPhone did. But a the same time, it had certain features unique to it. It had iBooks (which was latter made multiplatform), iWork (as also made multiplatform as time passed), and other things too. When the iPad 2 launched, it made some changes like the addition of a camera, thinner design and better display.

    So, with a quic review of the timeline of the products of both companies, do you see what made Apple’s products such a threat? The advantage that apple had over Nintendo, in my perspective, is described in a simple word, flexibility!

    If you compare the evolution of these products, you will notice that Nintendo has limited itself to gamers alone. An is only beginning to expand its scope recently. Meanwhile, Apple went after the general public. You can use an iPhone or iPad for photography, reading, video recording, editing documents, making presentations, playing games, etc.

    In other words, those who are not gamers can one day decide to go to the app store and giv this game a shot, end up liking t and becomes a gamer.

    Now, based on the situation above, do you really think that that newly casual gamer will bother investing $180 on a Nintendo 3DS and an extra $40 for each new game they want to play when there are many good, cheap ones in the app store? No, why would they do that if they are just casual and don’t play much?

    What apple has done, and is something Nintendo needs to do in order to keep up, is make a product that is flexible enough to suite multiple markets. Not just a product that targets one market.

    There is no doubt that the Wii U is a step in the right direction because it now (or is said to) support video calling which Is a way of cummunication. That should attract a bigger audience. However, the downside to it is that it is not portable. Another good step they took is th addition of swap note for the 3DS. With a little enhancement (provide a keyboard feature to type notes in addition to drawing, make it compatible with the wii u, and improve performance), this can serve as a good messaging feature for the Nintendo products. It will increase its competitive edge with Apple. There are other things that I can suggest. But right now, say work towards increasing swop note’s capabilities. I see a lot of potential in that feature.

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