This week Nintendo’s mid-year financial report revealed a sizable hole in their finances to the tune of 20 billion Yen, making this the first time since the mid 80’s that the company has posted a loss. Company boss Satoru Iwata attributed this shortfall to a weak game line-up, the soaring Yen and price cuts to their 3DS and Wii consoles.
Year on year Nintendo has experienced a 40% drop-off in sales accompanied by an 80% drop in profit, with this week’s 20 billion yen loss making for a stark contrast to last year’s 30.9 billion Yen profit. Nintendo President Satoru Iwata attributed this largely to their relatively weak line-up of software titles, which he blamed on Nintendo’s preoccupation with Wii U development. This seemingly indicates that Nintendo may have been caught flat footed by the Wii’s rapidly waning popularity, forcing Nintendo to move on their Wii successor before they were ready, diverting resources away from their newly released 3DS system in the process. Nintendo indicated that the final iteration of their Wii U hardware will be previewed at 2012’s E3 and be launched shortly thereafter.
Other causes for Nintendo’s softening financials include both the soaring Yen and the fact that they were forced to cut the prices of all their available hardware, thus squeezing their already delicate margins. Nintendo’s stock has tumbled by 50% since April 1st of this year, while the Nikkei as a whole has fallen a mere 8.5% – the company will be looking to their strong November line-up to reverse their ailing fortunes.