Nintendo projects $838M annual loss, first in 30 years

Competitions from mobile games on smart phones prove to be tough competition

Nintendo will likely have its first annual loss for the first time in 30 years, as the company reported earnings for the first three quarters of its fiscal year that were even worse than expected, showing a staggering $627.9 million loss for the nine-month period ending in December 2011.

To put that in some kind of perspective, the company reported a $638 million gain for the same time period the previous year. Nintendo posted an eight-year low in the Osaka Securities Exchange after its announcement Thursday, dropping as low as 7.8%.

The company posted profits of about $631.6 million for the period between October and December 2011, which represents a 61% quarterly drop.

Nintendo attributed its big losses to slower than predicted sales of the Nintendo 3DS, and stiff competition from social networking games and mobile games.

Long story short, Nintendo is not looking good right now.

Nintendo said in a seperate statement that it projects an $838 million loss for its full fiscal year, which will end in March, a much bigger loss than was predicted at $257 million back in October. The company also cut its forecast for annual sales of the Wii console to from 12 million units to 10 million units, and for the 3DS handheld devices from 16 million to 14 million.

"We had higher expectations for the year-end season, but failed to meet them," Nintendo President Satoru Iwata told reporters in Osaka, as reported by Reuters.

The 3DS launched last March to disappointing sales, after which the price of the device was cut from $249.99 to $169.99. In late 2011 new games from the very popular Mario franchise debuted on the 3DS, "Super Maro 3D Land" in November and "Mario Kart  last month, which both gave the device a much-needed boost. 

"To say that (the days of consoles) are over is likely an overstatement," said Shigeo Sugawara, analyst speaking to Reuters, "but social network and Internet delivered games are growing and structurally changing the future of the industry, which is a strong wind against Nintendo."

Nintendo also announced Thursday its intention to release their WiiU console in the U.S., Europe, Australia, and Japan by the end of 2012 . Let's hope it will be enough to right the ship...

[Image Credit: Wii.MMGN.com]