Nintendo posts full year loss after weak Wii U sales
- 7 May 2014
- From the section Technology
Weak sales of its games consoles have led Nintendo to report an annual loss.
The Japanese firm reported a net deficit of 23.2bn yen ($229m; £135m), a reversal of its 7.1bn yen profit the previous year.
It said lower-than-expected demand for its Wii U console and 3DS handheld had caused sales to miss its forecasts.
However, it added that it expected forthcoming games would help it to turn around its fortunes ahead of a more fundamental shift in strategy.
The company still has more than 1.3tn yen-worth of net assets on its balance sheet thanks to the stronger performance of its earlier games systems.
That offers it some leeway as it attempts to refocus the business.
In March, its president, Satoru Iwata, announced it planned to establish a new division focused on "health", separate from its video games business, as it attempts to increase customer numbers.
However, he was not specific about what kind of products this involved or when they would launch.
Nintendo previously had success with the Wii Fit "home workout" hardware and software released for its last-generation console.
Its decision not to host a press conference at E3 - Los Angeles' Electronic Entertainment Expo - next month might indicate that a preview of the new technology is still some way off.
"The quality-of-life initiative, I think, is still in its embryonic phases and I don't think we will see any concrete development in that area for a number of quarters," Piers Harding-Rolls, head of games at consultants IHS, told the BBC.
"I definitely think it's too early to write off Nintendo. But its strategy reveals a company that is looking for new opportunities to grow its business - and trying to develop a new market from scratch holds significant risk."
The original Wii was the bestselling console of the last generation and its successor, the Wii U, beat its rivals - the Xbox One and PlayStation 4 - to shop shelves by about a year.
However, the Wii U and its main innovation, a touchscreen controller, have failed to live up to Nintendo's own expectations.
The firm initially forecast nine million units would be sold over the year to 31 March 2014. In fact it sold just 2.72 million machines despite cutting the price of the console.
That brings total sales since launch to 6.17 million Wii Us.
By contrast, Sony sold more than seven million PlayStation 4s and Microsoft shipped more than five million Xbox Ones - both within five months of their launches.
"The content has not highlighted the unique offering of the Wii U, and has not explained how it's different from the other platforms and the previous Wii," said Mr Harding-Rolls.
Nintendo appears to concur with this analysis, saying it intends to release more games that take advantage of its gamepad's inclusion of an NFC (near field communication) chip.
Pokemon Rumble U uses this feature to unlock content when toy characters - which can be purchased at additional cost - are placed on the controller, but other titles have yet to exploit the facility.
Nintendo also highlighted the forthcoming release of titles originally developed for its touchscreen DS handheld that would run on the Wii U's gamepad, to boost its library further.
In addition, it forecast that the release of the driving game Mario Kart 8 this month and the fighting title Super Smash Bros in the winter would attract more gamers to the platform.
As a result it predicted 3.6 million Wii Us would be sold this business year.