Nintendo Predicts Its First Annual Loss In 30 Years
Based on a strong Yen and lower-than-expected sales of its 3DS system, Nintendo predicted it would post a yearly loss for the first time in its 30-year history.
The net loss may be 20 billion yen ($264 million) for the year ending in March, compared with a previous projection for a 20 billion-yen profit, Kyoto, Japan-based Nintendo said in a statement today. That compared with the 12.2 billion-yen average profit of 22 analysts' estimates compiled by Bloomberg.
Nintendo, which gets about 80 percent of its revenue from Americas and Europe, is predicting lower profit after the yen gained against the dollar and surged to a decade high against the euro, trimming the repatriated value of overseas sales. President Satoru Iwata cut the price of the 3DS by 40 percent in August as gamers flock to Apple Inc. (AAPL)'s iPhone and iPad, and Facebook Inc.'s website.
That Yen loss is significant. The AP says as the exchange rate fluctuated, the company loss $689 million because of it. The AP also points out that aside from the iPhone and iPad, Nintendo is also facing competition from Sony's PlayStation Vita, which goes on sale in Japan in December and in the U.S. early next year.