Nintendo, the Japanese video game maker that used to be one of the top names in the gaming industry, reports its first ever operating loss, as digital gaming started trekking away from gaming consoles and toward smartphones and tablets.
The New York Times said Nintendo reported a deficit of $470 million for the financial year that ended on March 31, as the popularity of its Wii gaming console started winding down, left in the dust by gaming rivals in this new age of smartphones and tablets.
Nintendo Wii experienced a precipitous drop in sales starting last year, with the company’s DS handheld console and its newer 3DS version suffering consumer apathy in favor of quicker, more convenient game applications played in mobile computing devices.
At the start of the financial year, Nintendo was expecting to sell 13 million Wii consoles, but ended up disposing of only 9.8 million. It targeted sales of 16 million for the 3DS console but managed to sell only 13.5 million of the controllers.
The company is set to release a new version of its controller, the Wii U, sometime later this year, but prospects remain bleak as Nintendo chief Satoru Iwata admitted his company’s lackluster record for the previous business year.
He did not however indicate any possible change in strategy as Nintendo battles the new gaming trend now based on powerful new smartphones, clearly putting the Wii U’s viability and profitability in jeopardy.
Observers said Nintendo may have to do a dramatic turnabout in its business strategy and veer away from its present gaming hardware manufacturing plans, and instead develop its games such as the popular Super Mario to be used on devices made by other manufacturers.