Japanese video game giant Nintendo posted a surprising quarterly operating loss, hurt by sluggish sales of its 3DS handheld game player and a strong yen, and slashed its full-year forecast to far below market expectations.
The weak 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.
Weaker-than-expected sales of Nintendo's 3D-capable games device and doubts over whether it can replicate the success of its Wii home console have dampened enthusiasm for the company's stock, which has lost about 30 per cent in the past three months.
Nintendo kept its full-year sales forecast for the 3DS handheld at 16 million but said it would cut the device's suggested retail price in Japan by 40 per cent to 15,000 yen. It also lowered its sales forecasts for the non-3D DS handheld and Wii console.
Nintendo booked an April-June operating loss of 37.7 billion yen (€335.2 million), against the market consensus estimate for 7.1 billion yen profit.
The ased company slashed its annual operating profit forecast to 35 billion yen from an initial forecast of 175 billion yen. The new estimate is far short of the consensus of 154.9 billion yen based on 24 analysts.
Last month, Nintendo unveiled its next-generation Wii console, which includes a touch screen controller and high-definition graphic support, but market watchers were underwhelmed with the device's lack of social networking capability.
Shares in Nintendo have tumbled about 30 per cent since the company issued its previous annual forecast on April 25th, versus a 2 per cent rise in the benchmark Nikkei average during the same period.
Reuters
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