Nintendo reports $533 million annual loss

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by KING 5 News

NWCN.com

Posted on April 26, 2012 at 6:30 AM

Updated Thursday, Apr 26 at 7:46 PM

SEATTLE – Nintendo is reporting an annual loss of $533 million dollars, the biggest net loss for the company in three decades.

Some are blaming the Microsoft Kinect, which is a direct competitor to the Wii gaming console. Wii sales fell by more than 3 million units versus the Kinect. Some analysts believe that competition from online social-networking games and smartphone apps will make a permanent dent in the gaming console market.

Another issue is Nintendo 3DS sales. The price of the handheld gaming device was slashed and sold below cost. Nintendo stopped that practice in the middle of last year.

"They want to have iconic franchises like Mario and Zelda on their own devices, and not on the iPhone or Android devices. And these types of financial results could force them to take a second look at that strategy," said technology journalist Todd Bishop with Geekwire.com. "Nintendo has made a habit of posting profits every year throughout its history and this is a big loss for the company.”

Nintendo's losses worldwide could certainly impact their presence in the Northwest. The Redmond headquarters and the production facility in North Bend employ about 1,200 workers, according to several websites, but the company is the majority owner of the Seattle Mariners.

Nintendo says it plans on sales of the 3DS to pick back up and be profitable by the end of 2012.

The company also plans to launch its updated Wii U console, which comes equipped with high definition graphics and an LCD touchscreen controller.

Another factor affecting Nintendo's earnings is the currency market. A strong yen erodes the value of overseas earnings of Japanese manufacturers like Nintendo.

Additional reporting from KING 5's Elisa Hahn and the Associated Press.

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