Nintendo Records First Ever Loss – Slashes Prices To Remain Competitive. The Problem? Smartphones And Tablets

Nintendo Records First Ever Loss – Slashes Prices To Remain Competitive. The Problem? Smartphones And Tablets

Japanese video game specialist Nintendo is slashing the cost of its 3DS hand-held player following weak sales. The decision was announced after the company announced its first ever quarterly operating loss, which came as a shock to the markets. The loss figure for April-June came in at $483.6m (£296.1m) while its annual operating profit forecast was also slashed.

 

Nintendo kept its full-year sales forecast for the 3DS at 16 million but said that was because it would cut the device’s suggested retail price worldwide. In Europe, the figure falls by “around a third”, according to a company statement. The move comes into force on August 12. The Nintendo Wii has proved more popular in the home gaming market Nintendo said: “The ultimate price to consumers is, of course, determined by retailers, however we look forward to consumers benefiting from much lower retail prices very soon.” It is currently selling for £169 on Amazon – down from £229.99.

 

The weak corporate result underscores concerns among investors that Nintendo is too focused on hardware at a time when the market is shifting to software, with games played on the internet and smartphones seen as a key driver of industry growth. Doubts over whether 3DS can replicate the success of its Wii home console have dampened enthusiasm for the company’s stock, which has lost about 30 percent in the past three months.

 

Last month, Nintendo showed off its next-generation Wii console, which includes a touch-screen controller and high-definition graphic support, but market watchers were disappointed by the device’s lack of social networking capability.

 

Analysts have noted that Wii may be having side competitions from smartphone and tablets.

 “Gaming hardware is definitely not the place to be. “Smartphones and tablets like the iPad provide a great gaming experience. “These devices have very powerful graphics and increasingly they combine features such as motion control which help provide a richer gaming experience.”, said Keith Woolcock from investment research firm 5th Column Ideas.

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