Nintendo posts larger than expected loss despite Mario Kart
- 30 July 2014
- From the section Technology
Nintendo has reported a bigger first-quarter loss than expected, causing its share price to tumble.
The Japanese company posted a 9.9bn yen ($97m; £57m) deficit for the April-to-June months, compared with an 8.6bn yen profit for the same period a year earlier.
Sales were 8% lower, despite the release of a Mario Kart game in May - one of its most popular franchises.
The firm did not alter its prediction of a return to full-year profit.
It sank to a loss in its last financial year.
Nintendo said it expected the release of key titles over the coming months to boost demand before the critical Christmas shopping season.
These include new Super Smash Bros fighting games for its Wii U and 3DS consoles, as well as the action title Hyrule Warriors for the living-room machine and two Pokemon monster-collecting remakes for the handheld device.
Nintendo won praise for the innovative titles it showcased at the recent E3 video games expo in Los Angeles, where it unveiled a new open-world Legends of Zelda title and the paintball arena shooter Splatoon, both due to be released in 2015.
But one analyst suggested the releases would come too late.
"They have a relatively good games pipeline, but the big question is about its hardware," said Ed Barton, a games industry analyst at the Ovum consultancy.
"The Wii U is so far behind now, and the perception of the audience that it's a relatively under-powered console compared to the PlayStation 4 and Xbox One is now pretty firmly cemented.
"Given how inaccurate some of Nintendo's forecasts have been going into their results in terms of hardware and software sales in the past, I'm not optimistic."
Nintendo originally forecast it would sell nine million Wii Us in its last financial year. In May it revealed it had sold only about 2.7 million units despite a price cut.
A further 510,000 Wii Us were sold over the most recent quarter, taking the total tally since its 2012 launch to 6.7 million consoles sold.
Nintendo did not host a conference call following the earnings release, as it normally does, meaning analysts were unable to quiz executives about the progress of previously announced plans to establish a health division and release new devices for emerging markets.
Its president, Satoru Iwata, had previously cancelled appearances at E3 and the firm's annual shareholders' meeting after doctors found a "growth" in his bile duct, requiring him to have surgery.
He wrote a letter late last month saying he had resumed work "by email and by other means" but was not yet ready to return to his regular schedule.
Documents posted online do, however, offer a couple of other insights:
- 2.82 million copies of Mario Kart 8 were sold worldwide during the game's first month on release, making it the firm's only "million-seller" during the quarter. In fact, it accounted for more than 60% of all Wii U games sold over the period
- Nintendo's total assets declined by 6% over the three months, taking them to about $12bn
The news was released after the close of the Japanese markets, but Nintendo stock traded on the Frankfurt Stock Exchange had fallen about 6% from its opening price by early afternoon.