Japanese gaming giant Nintendo on Friday warned it would swing back into
the red this fiscal year as it slashed its annual sales target for the
Wii U game console, blaming a poor performance over the festive holiday.
surprise revision came in marked contrast to rivals Sony and Microsoft
who have seen huge demand for their new consoles as the firms battle for
control of a sector worth about $44 billion annually.
said Friday it expects a loss of 25 billion yen ($240 million) in the
year to March, reversing an earlier 55 billion yen net profit forecast,
while annual revenue would drop 36 percent to 590 billion yen.
company, maker of the Donkey Kong and Super Mario brands, also said it
expected to sell just 2.8 million units worldwide of the Wii U, way off
earlier predictions of 9.0 million consoles.
Nintendo said its
hopes for big holiday season demand were dashed, forcing it to chop
forecasts as demand for the console's high-margin software slumped.
hardware sales failed to reach expected levels during the year-end
sales season, sales of software, which have a high profit-margin, fell
significantly below our forecast," it said in a statement.
Nintendo's top executive is to hold a news briefing in Osaka later in the day.
downgrade came as key domestic rival Sony saw record demand for its new
PlayStation 4 console, which had already sold more than 4.2 million
units by the start of the year.
(Also see: Sony PlayStation 4: 4.2 million, Microsoft Xbox One: 3 million)
The console was launched on November 15.
rival Microsoft has also seen robust demand for its Xbox One console,
which sold more than one million units in the 24 hours after its
(Also see: Xbox One sales top one million units in first 24 hours: Microsoft)
For Nintendo, the latest forecast is especially
disappointing after it scratched back to profitability in the six months
to September thanks to a sharply weaker yen, which inflates Japanese
firms' repatriated profits.
The company has previously blamed weak
earnings partly on high development and marketing costs for the Wii U,
although sales of its 3DS handheld console and related game titles fared
Nintendo, which cut prices for both products to shore up
flagging sales, launched the Wii U in late 2012 with high hopes it would
repeat the original Wii's blockbuster success.
(Also see: Nintendo announces 2DS handheld gaming device, slashes Wii U price)
But analysts said a
lack of games took away some of the fizz the company had been hoping
for after the 3DS the world's first video game console with a 3D screen
that works without special glasses had initially suffered from
disappointing demand abroad.
Sony, Nintendo and Microsoft are
giants in the global videogames industry, but have faced tough economic
conditions in their key US and European markets, while also fending off a
challenge from cheap or sometimes free downloadable games for
smartphones and tablets.
Nintendo's Tokyo-listed shares ended down 2.75 percent at 14,645 yen on Friday, before the firm made its announcement.