Nintendo announces first-ever annual loss, blames declining portable sales

Nintendo-Mario

For the first time in three decades — for the first time in videogame history, really — Nintendo is reporting an overall annual loss for fiscal-year 2011. According to Bloomberg, part of the blame goes to the general state of the world economy. But perhaps more intriguingly, the company also claimed that their lucrative portable-games corner was underperforming, saying in a statement: “Sales of Nintendo DS hardware and Nintendo 3DS software were weaker than expected.” It’s no secret that the much-ballyhooed 3DS has been a sales disappointment — Nintendo already slashed prices for the extra-dimensional device in August. But it’s intriguing to hear that sales of the DS hardware might be hitting a wall.

The DS has been minting money for Nintendo for the last half-decade, helping to foment the casual-gamer revolution. (It’s a mere three million units away from becoming the best-selling console ever.) It could be evidence that the Angry Birds era of smartphone/tablet games will make portable consoles like the DS a thing of the past.

Nintendo has a big year ahead. Next month sees the arrival of the newest incarnation of Legend of Zelda, which has earned rapturous reviews from British people. And next year, Nintendo will kick off the next generation of videogame consoles with the Wii U. They’ll probably be fine. But this is a little bit like that moment in 2005 when Pixar had to trim its annual forecast because of lower-than-expected DVD sales of The Incredibles. That apparent aberration was an early indication of the collapse of the DVD market. Might something similar be happening with portable consoles? Will Nintendo suffer from the casual-gamer culture it helped create? Time will tell.

Follow Darren on Twitter: @EWDarrenFranich

Read more:
Why are videogame sales falling?
Nintendo 3DS review: Is glasses-free 3-D gaming worth it?
Nintendo Wii U: We’ve played the successor to the Wii!

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Comments (33 total) Add your comment
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  • pastafarian

    Note to Nintendo: No one asked for 3D portables. File this next to the Virtual Boy, and get back to making games for gamers.

  • amy

    My son still plays with his DSI and just got a Nintendo 3DS for his birthday! Don’t understand this article at all!

    • Eric Nixon

      Oh, well never mind. Your two purchases clearly helped keep them out of the red.

      • amy

        Smartass! All my kids friends play with theirs all the time!

      • M

        Wow Eric, pretty rude…..

    • Brock

      No one cares about your life, you can’t extrapolate the goings on of an entire company based on what you bought your two sons.

  • guest

    my neighbor makes $61 an hour on the internet. She has been without a job for 10 months but last month her paycheck was $7055 just working on the internet for a few hours. Read here at CashHard.co m

    • amy

      That’s funny!

  • The Mexican Staring Frog Of Southern Sri Lanka

    Um… Of All the companies in the world i’m pretty sure Nintendo is safe.

  • M

    The price point for the 3DS was offputting especially since it seems that its just a regular DS but with the extra 3D feature. Now i know that its not, I know about its other features and improvements, but to alot of people it probly seems to be just another version of the DS Lite.

    On top of this there is the struggling economy AND the popularity of tablets and smartphones. Its a tough sell at this point. I will say that some of the exclusives like Luigi’s Mansion 2 and Mario Kart 7 are making me wish i had one though.

    I’m also wondering what this will mean for the Vita.

    • Trey

      Oh, that’s a good point, too.

  • Trey

    Nintendo’s done with. Wii was a very good idea, but ultimately flopped majorly due to their lack of having games worth playing (and yes, I do mean the constantly rehashed mario games), and Wii U will flop just as bad, if not worse, with it’s super clunky looking controller. They need to start thinking along the lines of Sony or Microsoft, in terms of what can/will work, and what games want/don’t want.

    • Jeff

      How did the Wii flop exactly? Check the numbers on that one. I have had one since just after the launch. I have around 25-30 games. I have enjoyed all of them. Best part if the Wii is my very casual gamer wife can join in. My parents have one too. When you get people in their ’60s playing games – that is impressive.

      • Jeff

        Part if the problem with Sony and Microsoft is they are pretty much selling the same games. When3rd party developers aren’t lazy and show some creativity, you get some excellent Wii games. Most developers want to push the same game on 3 machines. Then you pretty much get 400 Halos with different characters.

    • Michael

      Way off base calling the Wii a flop. First off, it sold 84 million units worldwide. Secondly, Nintendo make money on each and every one of those. Sony and Microsoft have yet to see a profit on their consoles. Jeff is right in his response, Nintendo worked to expand the gamer base, not just pander to the Halo/Call of Duty loving 20 something. Most of all, the gaming business is big enough for all three systems. No need to bash on a system you personally don’t like.

    • M

      they DO need to look to Microsoft and Sony for the online component especially. and i’m worried too about the Wii U. but i refuse to count Nintendo out. everyone was having the exact same conversation after the Gamecubr/Xbox/PS2 generation

  • Jed

    They just need to do away with the 3DS and create something better but they should have no worries in the years to come, but start coming up with more exciting games.

    • mr koolaid

      Doing that would be financial suicide, you do know that, right?

      I personally think that after the 6-7 year life cycle of the 3DS, Nintendo should make a sleek sexy handheld and focus more on adult games. They already are with the Wii U so hopefully, Nintendo starts doing things right

  • Guest

    Wiith wii sales nearly equalling xbox 360 and playstation 3 combined I would take that kind of flop anytime..besides nothing beats Zelda

  • Michael

    I think Nintendo will keep its head up, with the upcoming games for the 3DS, and The Legend Of Zelda: Skyward Sword for the Wii. I still will always be a NIntendo gamer.

  • amy

    Does anybody know how much the WII U is gonna cost when it comes out?

    • mr koolaid

      No one knows yet, Nintendo hasn’t announced it.

      You should wait till next year in June when they talk about it in E3 2012

      • amy

        June? I thought it was coming out in Jan! Thanks for answering!

      • mr koolaid

        No problem! The reason I say June is because that’s when the Electronic Entertainment Expo (E3) takes place every year. Video game companies like to show off their upcoming games and new consoles during E3.

  • lisa

    Maybe its because everyone I know and their children already own one form of the ds. Just saying. Having worked at a game store for most of my life, you have to know how to sell the games. I have 3 boys and I can tell you as long as they come out with quality games this indusrty will never die. Just please, nintendo, please, stop with the pokemon games.

    • mr koolaid

      But that’s one of Nintendo’s best sellers

      Personally, not a fan of the series (outgrown it after age 9) but it really does miracles in driving in big sales for Nintendo

      Mario Kart 7 and Super Mario 3D land which will come out next month and in early December for the 3DS will get a TON of sales, hardware and software wise. I still see kids playing Mario Kart DS on their DS, it’s a fun game

  • Ben

    I wouldn’t be too worried. The original DS had a horrible launch, too- and now it’s the best-selling system in history.

  • Kel Varnsen

    I imagine a big part of the 3ds underpeforming is that thier handhelds are now competing with units that can play games, plus browse the web, play music, take photos, send texts and make phone calls. For alot of people why buy a 3ds when you can buy a smart phone that plays games and does a ton of other useful stuff?

    • John T.

      Exactly, plus most of the games on iTunes are 99 cents. And you don’t have to lug around cartridges.

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