Nintendo 3DS 2Q sales rebound as price cuts kick in

Japanese game maker says sales of its flagship handheld are on the rebound, but it now predicts an overall annual net loss.

Sales of Nintendo's 3DS handheld game console rebounded over the last quarter as it slashed prices, but the company said it is facing deep financial losses, and doesn't expect a true turnaround for the device until a host of new games are released over the next few months.

The Kyoto-based game maker said it had sold 3.07 million 3DS units worldwide from April through September. The company earlier said it sold just 710,000 over the first three months of that span, meaning sales more than tripled during the second three months, though Nintendo did not release official quarterly figures.

Nintendo still aims to sell 16 million 3DS units in the year through March, so it will need a strong holiday stretch. The company said in its earnings release for the first half that global price cuts had begun to show results, but its lack of of popular titles was a major burden, with only "The Legend of Zelda: Ocarina of Time 3D," selling well enough to be considered a "hit."

It predicted it will now book an overall net loss for the fiscal year through March, after saying just three months ago that it could end up in the black. The company has been scrambling to kick start sales of the flagship 3DS, which started strong and then fell sharply a few weeks after launch.

In August, Nintendo slashed the price of the 3DS by up to 40 percent globally, less than six months after sales began.

It has announced a fleet of new video games for the device for the coming months, including popular titles such as Monster Hunter and Mario Kart, plus a new peripheral that will add an additional slide pad and buttons. It has also announced a software upgrade for the end of November that will let users take up to 10 minutes of 3D video.

Overall, Nintendo has now sold 6.68 million 3DS units in total worldwide, which includes a brief period during its last fiscal year when units flew off shelves after it went on sale in Japan.

The company's other main product, its Wii game console released in 2006, also saw sales of both hardware and software titles fall in the first half compared to the year-earlier period.

Nintendo said it booked an overall ¥70.27 billion (US$925 million) loss in the six-month span, and said it now expects to have a ¥20 billion net loss over the fiscal year through March.

Just three months ago, Nintendo predicted it could make an annual ¥20 billion profit, in its September earnings announcement. That prediction was already a deep cut from May, when it foresaw a net profit of ¥110 billion.

The 3DS is Nintendo's follow-up to its DS handheld, one of the best-selling video game consoles of all time. The company equipped one of the new model's two screens with technology that simulates a three-dimensional effect without the need for special glasses.

Nintendo sold just 710,000 units of the 3DS in the April-June quarter, a big drop from the 3.6 million sold during its first five weeks on sale. The 3DS launched in Japan on Feb. 26 and in most other markets in late March.

The game company is bracing for competition from Sony, which is due to release its new PlayStation Vita handheld in Japan on Dec. 17 and has already sold out in online pre-orders. The game, which features two control sticks plus an OLED touchscreeen and rear touch pad, is due to launch in Europe and North America on Feb. 22.

Both companies are also fighting off a deluge of inexpensive but popular games on mobile phones and tablets.

Tags Nintendobusiness issuesgamesfinancial results

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Jay Alabaster

IDG News Service

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