NINTENDO said today it posted its first annual loss in more than three decades, dragged down by price cuts for the company's 3DS handheld game system and Wii home console, and valuation losses on its foreign currency holdings due to the strong yen.
The Japanese video game giant said it fell into the red with a net loss of �43.20 billion ($530 million) in the fiscal year that ended March 31, compared with a profit of �77.62 billion a year earlier.
Revenue fell 36 percent to �647.65 billion yen in the year, while it recorded an operating loss of �37.32 billion.
Nintendo does not break out its earnings on a quarterly basis.
The loss comes as Nintendo is phasing out two ageing game systems for newer models. Last year, it introduced the Nintendo 3DS, a successor to the DS handheld, to a lukewarm reception and the company has said it plans to debut a new home console, the Wii U, later this year.
Nintendo is no longer competing only with traditional video game hardware manufacturers, such as Sony and Microsoft. Free or inexpensive social games and a growing line-up of titles available on smartphones and tablet computers provide an additional draw to consumers.
For the current fiscal year, Nintendo said it is targeting a net profit of �20 billion and an operating profit of �35 billion on revenue of �820 billion.
The company's forecasts are slightly below analysts' estimates of a net profit of �31.04 billion and an operating profit of �40 billion on revenue of �832.72 billion, based on forecasts compiled by Thomson Reuters.
After a sluggish start for the 3DS, which plays 3-D games without the need for special glasses, Nintendo slashed the price of the machine by 40 per cent in August and demand accelerated with the introduction of 3DS versions of two popular game franchises - Super Mario 3D Land and Mario Kart 7.
Nintendo said it sold 13.53 million 3DS units in the past fiscal year and expects to sell 18.5 million units in this fiscal year.
Another drag on Nintendo's results is the strong yen - the company keeps much of its cash in foreign currencies, so a stronger yen inflates paper losses on its reserves when converted into the Japanese currency, while a weaker yen leads to paper gains.
The dollar reached a record low against the yen of �75.31 on October 31. The US greenback changed hands at �81.16 early today.
For this fiscal year ending March 2013, Nintendo said it has foreign exchange rate expectations of the dollar at �80 and the euro at �105.
Source: http://feedproxy.google.com/~r/newscomaumostpopularworldndm/~3/fjN_UQ2Bu3k/story01.htm
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