Nintendo losses continue, but improve

Nintendo made a loss of ¥17.2 billion (£141.76m) in the financial quarter ending June 30, though the company is heading in the right direction ahead of the launch later this year of Wii U. This time last year, losses were ¥25.5 billion.
Net sales revenue for the quarter came to ¥84.8 billion (£697.7m), a drop of 9.7 per cent year on year - but an improvement on the 50 per cent decline the company was hit with last year.
3DS sales totalled just 1.86 million worldwide, with almost half of the hardware total sold in Japan. Around 920,000 units were sold in Nintendo's home country - which given the impact the strong yen has had on revenue from exports isn't the worst thing in the world, but does reflect the struggles Nintendo has had in building and sustaining momentum for its 3D handheld in the west.
Cause for cautious optimism, then - and Nintendo still forecasts a return to profit by the end of the fiscal year - but a breakdown of the company's historic performance in this quarter shows just how far it has fallen. In 2009, net sales were ¥423.4 billion - almost five times its revenue for the quarter just gone.
Nintendo says the release of 3DS XL will "solidly revitalise" the handheld's performance overseas, with the belated, vital acknowledgement of the importance of digital sales also expected to help. New Super Mario Bros 2 will be the first game to benefit from simultaneous digital and retail releases when it launches next month.
Internally, though, the immediate priority must surely be making 3DS hardware profitable again; Nintendo has been taking a loss on every system sold since the dramatic price cut last August. But one suspects Wii U's launch will be key. Nintendo will be first to market in the next generation of consoles, and it must ensure that opportunity is not wasted, with a substantial installed base required before Microsoft and Sony release next-gen consoles of their own in 2013.

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