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Nintendo reported an operating loss of 10.3 billion yen, or $132 million, during its first fiscal quarter, which ended June 30. Wii sales have dropped significantly, and gamers are now awaiting the launch of the Japanese company’s Wii U game console, which is expected to arrive later this year. The results show the peril of long transitions from one product generation to the next.
Clearly, the new console hardware can’t come soon enough. Rivals Microsoft and Sony have been gaining share for a while. The company is experiencing the Osborne effect, in which sales of its current generation console are dropping because it has announced its next-generation machine. Nintendo reported Wii sales of 710,000 in the quarter, down from 1.56 million units a year earlier. The handheld 3DS sold 1.86 million units, an increase from 710,000 a year earlier. The older DS sold 540,000 units compared to 1.44 million a year ago.
Nintendo reported a loss of 37.7 billion yen a year prior. Currency exchange losses accounted for 21.1 billion yen, and the overall net loss was 17.2 billion yen. Nintendo said that it plans to focus more on digital downloads to improve sales of the 3DS. Nintendo also plans to release a larger 3DS XL handheld at the end of July.
Sales overall were 84.8 billion yen, down from 93.9 billion a year ago.