Tokyo - Nintendo posted its third loss in the past four quarters as new Wii U titles featuring Super Mario weren't enough to keep gamers from opting to rival consoles and smartphones.
Nintendo posted a net loss of 9.9-billion yen in the three months ended June 30, the Kyoto, Japan-based company said in a statement. That compared with the 5.4 billion-yen average loss of three analyst estimates compiled by Bloomberg.
The maker of Zelda and Pokemon is rolling out new titles and a line of Amiibo figurines that interact with games in an effort to keep the Wii U competitive against consoles made by Microsoft and Sony. Nintendo also is struggling to cope with an accelerating shift toward mobile gaming and questions from investors about the health of President Satoru Iwata, who had surgery last month to remove a bile-duct growth.
“Despite strong sales of one title, Nintendo is a very large ship and one or two hits cannot easily move its dial,” Amir Anvarzadeh, manager of Japanese equity sales at BGC Partners in Singapore, said in an email.
The maker of the 3DS handheld player posted an operating loss of 9.5-billion yen in the quarter ended June. That compared with the 3.4-billion-yen average loss of five analyst estimates compiled by Bloomberg.
Sales in the quarter fell to 74.7-billion yen, compared with the 73.7-billion-yen average of five analyst estimates. Nintendo maintained its forecast for a net profit of 20 billion yen and operating profit of 40-billion yen this fiscal year.
Nintendo shares have lost 12 percent in Tokyo trading this year. The stock fell 0.6 percent to close at 12 325 yen before the earnings announcement.
“It is difficult for Nintendo to generate a lot of benefit from the Wii U,” Hideki Yasuda, a Tokyo-based analyst at Ace Research Institute, said by phone. “Nintendo has to put up with it for several years and needs to wait for the next console.”
Nintendo's Mario Kart 8, in which players can drive a Daimler Mercedes-Benz, has sold more than 885 000 physical and digital units in the US since its May release. The company sold 510 000 Wii U consoles in the quarter, and it maintained its forecast to sell 3.6 million this fiscal year.
Nintendo also sold 820 000 units of the 3DS player.
By next year, Nintendo plans to introduce several new titles, including Splatoon, which lets two teams take on roles as squids that morph into people and shoot different-coloured ink in timed matches. It will release a new Zelda game, a title called Xenoblade Chronicles X and a Mario racing game that lets users make their own courses.
Nintendo will release two Pokemon games for the 3DS and Captain Toad: Treasure Tracker for the Wii U in time for the holiday shopping season.
The company is also entering the multibillion-dollar collectible-toy market with its Amiibo figurines, which are similar to Activision Blizzard's Skylanders. Players can enter a Nintendo character into a game through the Wii U's GamePad tablet.
“What's important for Nintendo in the near future is how they promote their new figurine business,” Yusuke Tsunoda, an analyst at Tokai Tokyo Securities, said before the earnings announcement. “It's difficult for Nintendo to grow without as many new titles as they announced last year.”
About 10 Amiibos will be sold for use in Super Smash Bros., and more by year-end, Nintendo America President Reggie Fils- Aime said in June. - Bloomberg/Washington Post
* With assistance from Sonali Basak in New York and Robert Fenner in Melbourne