Mobile Computing News

Photo: Nintendo

Formidable gaming company Nintendo has just posted a net loss for Q1 2010 and while an occasional loss isn’t exactly a surprise for most companies, this is the first time the company’s net profit has declined in six years, let alone posting a loss!

The incoming Nintendo 3DS could well steady the ship, and so investors shouldn’t worry just yet. Nevertheless, the numbers Nintendo posted were surprisingly weak for the Apple-equivalent to the gaming world.

The poor numbers game

Nintendo posted a net loss of ¥25.22 billion (£187 million) for Q1 2010, representing a monumental drop off from the ¥42.32 billion (£313 million) profit the company posted at the same period last year. A revenue decline, which is often in-step with a profit decline, was also the order for the quarter for Nintendo. Revenue for Q1 2010 sat at ¥188 billion (£1.39 billion), notably less than the ¥253.5 billion (£1.88 billion) Nintendo posted in the same period last year.

Weak DS and Wii sales

The major contributor to the decline in Nintendo’s fortune is the weakened price of DS consoles in Japan. Add that to a stronger yen – which has an adverse effect on Nintendo’s business since 86.5 per cent of Nintendo DS consoles are sold outside the country, Nintendo was pulled, somewhat surprisingly, into the red.

What is going wrong?

Photo: Nintendo

There have long been calls for Nintendo to release a successor to the fast-ageing Nintendo Wii. Whatever Nintendo has planned in that space, it is certainly still a little way off, since no announcements have been made as yet.

Furthermore, one must wonder how Nintendo’s relative online weakness – when compared to Sony and Microsoft – isn’t beginning to tell. Whereas Microsoft is drawing over a billion dollars from Xbox Live in general, Nintendo is likely a country mile off of that mark, simply because online content delivery has never been a central focus of the company.

However the Nintendo 3DS is very promising, and is the most exciting gaming hardware on the horizon. If Nintendo can make it the repeat success that the DS was, who is to say that they won’t soon smash their own revenue records? What these results do confirm is that the Nintendo 3DS needs to be released as soon as possible. Which, for gamers, isn’t at all a bad thing.