Tokyo - Nintendo posted a lower-than-expected second-quarter loss yesterday and stuck to annual forecasts that count on festive season shoppers to drive a 20-fold surge in Wii U sales in the second half.
The net loss totalled ¥8 billion (R806 million) in the three months to September, based on figures derived from first-half earnings the company released yesterday. That compared with the ¥9.46bn average loss of three analyst estimates.
Nintendo cut the US price for its flagship console last month as company president Satoru Iwata tries to lure back consumers who prefer playing games on tablet computers and smartphones. Even with new titles including Pikmin 3, the creator of the Mario and Zelda franchises failed to capitalise on US video game product sales that jumped by almost a third last month, even before Sony and Microsoft release their updated consoles.
“Whether we can meet the target we committed to hinges on how year-end business will go,” Iwata said. “We expect Wii U to take off going forward when titles are prepared.”
Pressure is building on Iwata to fulfil his pledge to deliver ¥100bn in operating profit for the current fiscal year, a forecast he affirmed yesterday. The company had an operating loss of ¥23bn during the first half to September.
Nintendo sold 460 000 Wii U units in the six months, about 5 percent of its annual target of 9 million. The company’s 3DS sales totalled 3.89 million during the half, about 22 percent of its full-year target of 18 million.
“Nintendo hasn’t been able to come up with any notable innovations in the past years that can match the success of its Wii,” said Eiji Maeda, an analyst at SMBC Nikko Securities in Tokyo.
Nintendo shares fell 1.5 percent to close at ¥11 220 in Tokyo before the announcement. In early trade in Frankfurt, the shares fell 1.9 percent.
Nintendo has lost more than 80 percent of its market value since its shares reached a high of ¥72 100 in November 2007, after the introduction of the original Wii. Its market capitalisation is $16.2bn (R160bn), which is less than Samsung’s planned capital expenditures this year. – Bloomberg