Things aren't looking good for gaming giant Nintendo.
Word on the world's financial streets is that Nintendo on Thursday will post a loss of about 100 billion yen (that's $1.32 billion) for the first half of the year that ended on September 30. That's far worse than the 55 billion yen loss the company had previously forecast.
Japan's Nikkei business daily reported the news Wednesday — and that news hit the company hard with Nintendo shares tumbling as much as 7.5 percent to 10,800 yen.
So what's behind this staggering loss — which is expected to be confirmed tomorrow when Nintendo announces its July-September earnings? It seems to be a one-two punch.
For starters, Nintendo — along with many other Japanese companies — is suffering big losses thanks to a strong yen. Nintendo makes 80 percent of its sales overseas and, according to the Nikkei report, lost 40 billion yen ($526 million) in foreign exchange alone.
Meanwhile, the company has struggled to send its handheld Nintendo 3DS device flying off shelves as expected. Back in July it was forced to slash the price of the five-month-old device from $250 to $170. Meanwhile, Nintendo's Wii game machine — which once showered the company in money — has been on downhill sales slide for some time. It is, after all, five years old ... and also far outpowered by rival machines: the Xbox 360 and PlayStation 3.
Nintendo has certainly been taking steps to try to boost interest in the 3DS as the all-important holiday buying season approaches. It recently launched a 3-D video service for the device and revealed that the 3DS will soon be able to record 3-D video and stop-motion animation videos and. Even more importantly, Nintendo will soon launch big games such as the highly anticipated "Super Mario 3D Land."
And Nintendo has vowed to launch a new game console — the Wii U — next year as well.
But the road back to Nintendo's money-making heyday won't be easy. The 3DS will soon be up against Sony's rival PlayStation Vita game machine (launching in February) while the iPhone and other smartphones and tablets with their inexpensive game apps continue to lure people away from the once-dominant Nintendo DS line of gadgets.
Meanwhile, although In-Game editor Todd Kenreck and I liked what we saw when given a sneak preview of the Wii U at this year's Electronic Entertainment Expo, the device inspired confusion among many when it was first revealed and caused the company's share price to drop.
Still, while Nintendo may be down, I wouldn't count the company (home to gaming icons such as Mario, Luigi, Zelda and Pokemon, to name a few) out any time soon.
Reuters contributed to this story.
For more game news, check out:
- Nintendo 3DS adds 3-D video recording, stop-motion, Hulu
- PlayStation Vita jumps into the game in February
- 'Grand Theft Auto V' is coming ... to Los Angeles?
- 'World of Warcraft' is going to the pandas
- Mario, Master Chief take out Angry Birds, mob style
Winda Benedetti writes about games for msnbc.com. You can follow her tweets about games and other things here on Twitter or join her in the stream here on Google+ . And be sure to check out the In-Game Facebook page here.
