Nintendo heads for third consecutive annual loss as Wii U flops

Fri Jan 17, 2014 4:07am EST
 
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By Chang-Ran Kim

TOKYO (Reuters) - Nintendo Co Ltd said on Friday that sales of its Wii U consoles had flopped, pushing it to a third consecutive annual loss and raising a question mark over its future in a home console market increasingly dominated by Sony Corp and Microsoft Corp.

The company that got its start making playing cards more than a century ago slashed its global Wii U sales forecast for the year to March 31 by almost 70 percent to 2.8 million units. It cut its sales forecast for its handheld 3DS to 13.5 million units from 18 million. The Wii U is the successor to its hit Wii console.

Nintendo's president, Satoru Iwata, who last year pledged to return the hobbled game maker to profit this business year, apologized to shareholders at a briefing in Osaka, but said his failure to fulfill his promise did not mean he had to resign.

"There will be no major management shake-up in the short term," Iwata told reporters.

Pressure will likely mount on the architect of the Wii success in 2006 to step aside or shift course to focus on making money from "Super Mario" and other software titles. Nintendo so far has refused to allow its games to be played on machines built by competitors or on tablets or other mobile devices that are used by gamers.

In the past the company has blamed a lack of titles for poor sales, but even its popular family-friendly games are losing out on sales to more hard-core titles like "Grand Theft Auto" played on rival machines.

"The fact that the 'Wii U strategy' has failed is disappointing and will likely trigger a sell-off as soon as the market opens," said Makoto Kikuchi, chief executive of Myojo Asset Management.

Nintendo this business year now expects an operating loss of 35 billion yen ($335.76 million) compared with an initial forecast for a 100 billion yen profit. The new estimate also falls drastically short of the average forecast of a 54.7 billion yen profit in a survey of 18 analysts by Thomson Reuters I/B/E/S.   Continued...

 
Logos are seen on Nintendo Co's Wii U game console (bottom) and its controller at the company's headquarters in Kyoto, western Japan in this January 7, 2013 file photo. REUTERS/Yuriko Nakao/Files