Nintendo falls after forecasting big annual loss

Tokyo: Nintendo Co’s shares tumbled nearly 8 percent to an eight-year low on Friday after the game maker reported a sharp drop in quarterly earnings and forecast its first ever full-year operating loss, its game business hit by competing gadgets such as Apple Inc’s iPhone.

The maker of Wii home consoles and DS handheld game players is also struggling with a strong yen that erodes the value of sales overseas.

Nintendo shares were down 6.1 percent at 10,090 yen in early trade on Friday after falling as far as 9,910 yen shortly after the open, their lowest since February 2004. Nintendo has lost nearly 60 percent of its value since the start of last year.

Nintendo’s third-quarter operating profit fell 61 percent to 40.9 billion yen and it forecast an operating loss of 45 billion yen for the financial year to 31 March, far worse than analysts’ average forecast of a 4.2 billion yen loss.

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Its 3DS been a flop and Nintendo cut its full-year forecast for the handheld games device to 14 million from 16 million, even after a price cut in August, just six months after the launch.

The company, which faces stiff competition in the home console market from Sony Corp’sMove and Microsoft Corp’s Kinect, also cut its forecast for sales of its aging Wii console for this financial year.

Morgan Stanley analyst Mia Nagasaka said she expected earnings next year and beyond to hinge on sales of the 3DS and Nintendo’s next-generation Wii U, which is due to be launched in the United States, Japan, Europe and Australia in the year-end season.

“Our view is unchanged that (this financial year) should mark the bottom of the cycle and the earnings bottom,” she said, adding that the company needs to come up with innovative services for 3DS and expand software titles.

Reuters