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Nintendo, struggling with the poor reception of its latest handheld gaming system, said Thursday morning that it would have a wider than expected loss for the full fiscal year.
Nintendo posted a 61 percent drop in its third quarter operating profit and forecast a 45 billion yen ($838 million) operating loss for the full year. That will be the worst financial performance in the Japanese company’s history and its first loss since it started reporting earnings in 1981.
The 3DS handheld is now expected to sell 14 million units in the year ended March 31, down from 16 million earlier. Apple’s successful quarter offered a stark contrast, as it sold more than 37 million iPhones and 15 million iPads in the fourth quarter. The struggling Wii console, which is now being outsold in the U.S. by the Xbox 360, is expected to sell 10 million units instead of the predicted 12 million.
It’s hard to believe the quick turnaround in fortunes for Nintendo. The company dominated console sales after the Wii went on sale in 2006, but the novelty wore off and Microsoft fought back last year with the launch of the Kinect motion sensor, which has helped catapult the company to higher and higher sales.
Nintendo blamed the weak yen and weaker than expected sales.
“We had higher expectations for the year-end season, but failed to meet them,” President Satoru Iwata told reporters in Osaka.
Nintendo launched the 3DS in the U.S. in March 2011 at $249, but it had to cut the price to $169 in August in order to spur sales. That, in turn, cratered Nintendo’s profits. Now the company plans to launch its Wii U console to replace the Wii starting in the fall of 2012.
Profit fell to 40.9 billion yen for the normally strong third fiscal period ended Dec. 31, compared with a consensus estimate of a 52 billion yen profit. The net loss of 65 billion yen compares to an earlier forecast of 20 billion yen for the full fiscal year. Nintendo’s stock dropped 56 percent in the past year, wiping out $24 billion in market value.