Nintendo Puts Hope In Upcoming 3DS XL Widescreen, Wii U Launches

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(Image: Stock.xchng)
(Image: Stock.xchng)

BUSINESS

  • Q1 sales down 9.7% at 84.8 billion yen
  • 3DS sales top 1.86 million units, Wii sales at 710,000 units
  • 3DS XL due for release, Wii U to be released before Christmas

Nintendo posted a net loss of 17.2 billion yen ($221 million) for the first quarter ending June 2012 as the company continues to struggle with the strong yen and stiff competition.

The figures show an improvement on the same period last year, when Nintendo reported a loss of 25.5 billion yen, buoying hopes of a return to profit this year.

However sales for the quarter were 9.7% down at 84.8 billion yen as the videogame giant struggled to turn a profit on its 3DS console; it cites hardware profitability as the main cause.

Sales of the 3DS console reached 1.86 million units, while the Wii home system sold 710,000 units. The Wii U will replace the current Wii console by the end of the year.

New Models To Boost Sales

The company maintained its annual forecast and predicted it will again post profit before the conclusion of the year ending March 2013, placing its hopes in strong sales of the upcoming 3DS XL widescreen version of its handheld console, which is due for release in the coming days, and the Wii U, due out before Christmas.

The Wii U will be the first of the next-generation consoles to be launched, which is expected to give it a healthy head start over rivals. Sony’s PlayStation 4 and Microsoft’s Nextbox are not due for release until late 2013. However experts say both companies will use this time to boost their selection of games – an area where the Wii U is still lacking, and which is expected to drive rivals’ sales upward upon release.

The Kyoto-based firm has fared poorly against Sony’s PlayStation 3 and the Xbox from Microsoft, but profits have also taken a hit from cheap online games developed for mobile devices.

In August 2011, Nintendo slashed around 40% off the retail price of its 3DS in Japan, following its rocky launch in February. It was also forced to do the same in overseas markets to revitalize sales before the Christmas period.

Key Statistics - World Video Game Industry (source: Business Insights)

  • The global video games market, including hardware and software, is forecast to grow at an annual rate of 5.1% between 2009 and 2014. Revenue from software will account for the majority, with hardware revenue rising at an annual rate of 0.2% for the period.
  • The online gaming sector is rapidly expanding, and is expected overtake the PC and console gaming segments, with forecasts of annual growth rates at almost 14% between 2009 and 2014.
  • The fastest-growing segment of online gaming is social gaming, with annual growth rates of over 27% expected between 2009 and 2014, with casual gaming and massively multi-player online (MMO) gaming following. MMO was the largest contributor to online gaming revenue in 2009.

By James Mulholland for
James Mulholland is a Paris-based internet and broadcast journalist specializing in sports, current affairs and technology news, while also freelancing as a photographer.

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