According to fiscal reports of last year, Nintendo has revealed losses nearing 37.3 billion yen. When the company first introduced its home console Wii, things were looking great for the company because of the new and innovative features the console brought to regular homes. But with technology moving fast, the casual gaming industry is being swarmed by mobile devices, leaving Nintendo in a bad position.
On Thursday, the company reported its first ever loss since the launch of Wii of 37.7 billion yen. This is actually good news for Nintendo because of how things were looking for the company, analysts had already predicted a loss of 41.1 billion yen. The loss comes as the company sees declining sales of both its handheld and home console.
In an interview, analyst David Gibson said that the company is suffering due to the advancement in technology and with casual games coming to mobile devices such as smartphones and tablets. Nintendo’s main market consisted of casual gamers who include children and family friendly video games. With the increase of tablet and smartphone games, children and families are moving ahead to mobile gaming.
In 2011, Nintendo was expecting to sell 13 million units by the end of that year, but it only managed to sell 9.8 million units of Wii. For 3DS, the target was set at 16 million units but it only made it to 13.5 million. And for DS, things went quite bad as the company only managed to sell the half of what it expected to actually sell.
In order to save itself from another year of loss, Nintendo was forced to cut the prices on its handheld console, and with its new price, the company is now expecting to sell at least 18.5 million units to save itself from loss.
To many analysts it is clear that the declining sales of the console this year is due to the new console Wii U being released later this year. People are waiting for the new console and are hesitant to buy outdated home console by the company. Analysts predict that the launch of Wii U this year might be able to save Nintendo from declining profits.