NINTENDO sank to its first annual operating loss as its consoles failed to stave off the rise of mobile gaming.
The Japanese company fell to a ¥37.3bn (£285m) operating loss from a ¥171bn profit last year. Net profits plunged ¥43.2bn into the red compared to a ¥77.6bn profit last year.
The Kyoto-based company saw sales of its consoles, once a staple of the video gaming industry, dive as smartphones and tablets continue to claim market share.
Nintendo sold 9.84m Wiis in the year, failing to reach the 13m it expected to sell and falling far short of the 15m Wii devices taken off shelves in 2010-2011.
Around 5.1m DS devices were sold in the year-long period – less than a third of the 17.5m offloaded in 2010. The 3DS console, which rolled out in March 2011, proved to be the most popular Nintendo device last year, selling 13.5m but missing forecasts by two and a half million.
“Sales of the 3DS in Europe have not been as buoyant as those in Japan,” Nintendo chief executive Satoru Iwata said.
He expressed dissatisfaction at the results and the firm’s targets.
Nintendo’s answer to its sluggish sales is to launch a new product, the Wii U, later this year.
But analysts, who believe the Japanese company will have to charge $350 per console to break even, remain unconvinced that the Wii U will radically change Nintendo’s fortunes.
Looking ahead, the company behind Mario Kart forecasts a return to profit in the coming year and expects to generate profits of ¥35bn.
The weakening yen should help, as almost 75 per cent of Nintendo’s revenues come from overseas.