It’s Official: Nintendo Posts First Ever Annual Loss
The signs have been evident for some time. Diminished Wii Sales, their first ever quarterly earnings loss, not to mention the disappointing performance of 3DS. No wonder Nintendo lowered expectations last year, predicting they’d be posting their first ever net loss for fiscal year 2011. About those lowered expectations? Yeah, that was the right decision. Today, it became official: Nintendo has posted their first ever annual loss.
The wobbling giant reported $534.6 million losses on the $8 billion in revenue it pulled in in 2011. To put that in perspective, in 2010 they pulled in $960.5 million in profits on earnings of $12.6 billion. EEOUCH. There is a silver lining, however: Nintendo’s original forecast was much bleaker, estimating $804.3 million losses. Unfortunately, they also predicted $8.2 billion in sales. So you lose some, you lose some slightly less humiliatingly.
After the glory of the previous decade, Nintendo’s financial setbacks come as a mild surprise. The Wii remains the best selling console of the current generation with 95.85 million units sold, and the DS is the second best selling gaming device of all time, with 151.52 million total sales. However, Wii’s success was in capturing the casual gaming market, and that has changed considerably in the era of smartphones. No doubt Nintendo plans to reverse this with the upcoming Wii U, which so far looks like Nintendo going after core gamers again. We’ll find out at E3 whether or not it’s anything to shout about.