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Nintendo Posts $927 Million Loss, Downshifts Yearly Forecast

Nintendo’s first half of their fiscal year did not do so great. It’s not the $1.32 billion figure that some folks were tossing around yesterday, but it is still pretty bad. How bad you ask? How about $927 million in the red? That’s about $200 million more than Nintendo had expected before today’s earnings release, causing the Japanese company to revise its entire full year forecast.

Expected net sales are going down from $11.9 billion to $10.4 billion, which may seem like a lot, but there’s still $10.4 billion to rake in. If you really want to see how bad it is, just check out the difference in expected operating income: from $462 million to a measly $13 million. That’s before interest and taxes.

This means that at the end of March, Nintendo is expected to have gone 180° from a $264 million profit to a $264 million loss. For those following along at home, that would make for the first annual loss for the company in over 30 years. Its stocks have dropped to a five-year low and might plunge even lower by the day’s end.

In sourcing the problem, Nintendo pointed to not only a “much stronger Yen against the U.S. dollar,” but also “a smaller number of hit titles overall” with the Legend of Zelda: Ocarina of Time 3DS remake being the seemingly lonely standout from the crowd. Nintendo acknowledges this, stating the “Nintendo 3DS has yet to have many hit titles,” but they’re looking to the positive with increased sales after the August price drop and a better software lineup for the end of the year with Super Mario 3D Land and Mario Kart 7.

Looking at the report for the six-month period, it’s easy to see the software problem (as it relates to the 3DS). The Wii sold 26.45 million games and the DS sold 29 million (along with 3.35 million console and 2.58 million handheld units respectively), but the 3DS moved a relatively (and surprisingly) low 8.13 million pieces of software and 3.07 million hardware units.

Nintendo gets it, though; they understand where the problems are, and there’s a reason why they’ve been a video game juggernaut for so many years. It remains to be seen, though, if they can make their apparent solutions material.

Source Nintendo, Bloomberg

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