Nintendo to post unexpected loss as Wii successor falters
TOKYO (Reuters) - Nintendo Co Ltd, the world's leading gaming company by machines sold, said it will post an operating loss for a second straight year as the sales of its Wii U, successor to the 100-million selling Wii, faltered.
The company caught investors off guard by predicting a loss of $220 million in the year to March 31, reversing a profit forecast for the same amount, putting its new guidance well short of a consensus estimate of 12.1 billion yen ($133.48 million) profit from 19 analysts.
The grim outlook came even as a weaker yen provides a boost for a company that sells almost three quarters of its products outside Japan.
"It was a somewhat negative surprise," said Yasuo Sakuma, portfolio manager at Bayview Asset Management.
Nintendo, which began by making playing cards in the late 19th century, is counting on the Wii U to revive its fortunes as sales of the six year-old Wii slacken.
The latest offering from the creator of Super Mario faces competition from Apple Inc and other makers of mobile phones and tablet PCs that are attracting gamers with cheap or free games.
"The sales of Wii U were smooth at the beginning but since the turn of the year they have been losing momentum," Nintendo President Satoru Iwata told reporters in Osaka after revealing the loss forecast. He blamed the lacklustre performance on a dearth of games titles to woo players back.
"Due to delays in software development, we had to postpone sales of software products we had planned to (release) early this year, which is interrupting our sales," he said.
SOFTWARE SLUMP Continued...