Japanese game and console makers Nintendo announced profits on the half-year mark on Wednesday on the back of a weaker yen, while affirming that the dearth of sales of its Wii U console continued to affect its bottom line. Nintendo, makers of the Wii console franchise, announced a net profit of 600 million yen (around US$6 million) 6 months into the fiscal year, reversing a 28 billion yen loss from a year earlier, although the firm is still in the red in terms of operating costs, logging an operating loss of 23.3 billion yen. Overall sales of Nintendo products fell 2.2 percent to 196.6 billion yen.
The Kyoto-based owners of the Super Mario and Donkey Kong brands say that weak earnings can be blamed partly on the development and marketing costs for the Wii U, although sales of its 3DS handheld console and related game titles fared a little better. Because of the decrease in sales, the company had cut prices for both products. “The Wii U hardware still has a negative impact on Nintendo’s profits, owing mainly to its markdown in the United States and Europe,” it said in a statement. Nintendo launched the Wii U late last year with hopes that it would repeat the original Wii console’s blockbuster success. But industry experts say that the lack of games on the console made for disappointing demand abroad. “The Wii U is not as good as we had originally expected,” said Shun Tanaka, video game analyst with SMBC Friend Securities Center. “But the company’s crucial period is the Christmas selling season, which will determine how its annual performance turns out. So their real fight still lies ahead,” he added.
Competition will surely be fierce this season, what with rivals Sony releasing its PlayStation 4 and Microsoft rolling out the Xbox One just in time for the Christmas sales rush. Nintendo has been locked in an escalating war with its rivals for dominance of an industry worth around US$44 billion a year, but that market has seen an unexpected new player. These console companies now have to fend off the very real challenge of cheap – or sometimes even free – downloadable games for smartphones and tablets. Casual gaming on mobile gadgets has become the bane of more serious console gaming, and all three companies have to deal with this new reality in their market. Nintendo had hoped that the 3DS console – the world’s first video game console with a 3D screen that can be used without special glasses – would breathe new life into its sales, but the demand overseas was just not that good.
[via Yahoo News]