Friday, January 27, 2012
Dark Days for Nintendo: Company Posts First Annual Loss in 30 Years
Nintendo released its financials Thursday, stating an estimated annual operating loss of 45 billion yen ($575 million). This estimate was far higher than the 4.2 billion yen loss estimated earlier in the year. Part of this is attributed to declining sales of the Wii at the end of the console's run, and terrible sales of the much anticipated 3DS. Sales of the 3DS were so poor that Nintendo was forced to drop its price only 6 months after release. Nintendo's common stock dropped to its lowest levels since 2004, before the launch of either the DS or the Wii.
Nintendo has also been seeing Sony and Microsoft cut into the Wii's market with the Playstation Move and Xbox Kinect respectively.
I find this interesting after Shigeru Miyamoto's stepping down as head of game design in early December. I can't help but think that the move was related to the state of Nintendo's sales. Expect a paradigm shift in Nintendo toward different marketing strategies as they adapt to stay competitive in an ever expanding gaming market, with companies like Google (Google TV) and Apple (iPad) taking larger shares.
One bright spot at least is that Legend of Zelda: Skyward Sword has been the fastest-selling Zelda title. But is it enough?
What does this mean long-term for Nintendo?