Nintendo Co, the world’s largest maker of video game machines, more than tripled its full-year loss forecast as the success of Apple Inc devices erodes demand for the company’s 3DS handheld player.
The net loss in the year ending in March could reach ¥65 billion (US$838 million), compared with an earlier forecast of a ¥20 billion loss, the Kyoto, Japan-based company said in a statement yesterday. That was more than the average 29 billion loss forecast by 18 analysts tracked by Bloomberg.
Nintendo president Satoru Iwata, who cut 3DS prices by as much as 40 percent last year, said he expected full-year sales of 14 million units for the device that beams images in 3D, down from an earlier forecast of 16 million. The creator of Super Mario Bros games is predicting its first annual loss in at least three decades as a surging yen and consumer preference for gaming on the iPhone and iPad helped Apple more than double profit in the quarter.
Photo: Reuters
“The company faces a structural problem that people are opting for their smartphones and tablet PCs to kill their time,” said Mitsushige Akino, who oversees about US$600 million at Ichiyoshi Investment Management Co in Tokyo. “I can’t see Nintendo’s next strategy. There will probably be a discussion about how worse it can get.”
Operating loss in the year ending in March could reach ¥45 billion, compared with an earlier estimate for a profit of ¥1 billion, according to the statement.
Nintendo yesterday also reported a nine-month loss of ¥48.4 billion, compared with a profit of ¥49.6 billion a year earlier.
Nintendo had a foreign exchange loss of ¥53.7 billion in the nine-month period. Nintendo based its annual forecast on the exchange rate of ¥98 to the euro, revising from ¥106. The company kept its rates of ¥77 to the US dollar.
“Nintendo’s profitability may get lower in the long term because people are starting to stay away from video-game consoles,” Tomoaki Kawasaki, a senior analyst at Cosmo Securities Co in Tokyo said before the earnings release. “The yen’s gain is a burden for Nintendo as it hasn’t taken sufficient measures to deal with the impact of the strong currency.”
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