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Nintendo posts first annual loss

Company posts huge loss in 2011, sees a return to profitability in 2012

3DS

Nintendo posts first annual loss

by on April 26, 2012

As rumored, Nintendo posts its first ever operating loss in the company’s long history.  The declining market for its Wii console, and a slow start for its 3DS handheld at its original price, both played key roles in helping Nintendo lose money for the first time in a fiscal year.

It was no small loss either.  Nintendo lost over $533 million dollars in 2011 (fiscal year ’12), but things are apparently looking up for the company.  Aside from the sobering news of the annual loss, Nintendo pointed to the many bright spots that investors have to look forward to.  The company forecasts that it will once again swing into the black, and is banking on its 3DS handheld to see continued strength alongside a successful launch of it’s Wii U.

Nintendo’s early price drop of the 3DS caused for the company to sell each handheld at a loss, and once they dropped the price of the device it began selling like hotcakes in both Japan and worldwide.  Production costs for the 3DS should be on their way down, according to Nintendo.  The company should start seeing a profit from each device made, at some point in the upcoming year, which will definitely bolster the bottom line if the demand continues to be there.

The company is predicting a complete reversal of fortunes between 2011 and 2012, as it hopes to see a profit of around $247 for 2013 fiscal year.

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