For the first time in three decades, Nintendo will have spent more money than it earned during the year and post a net annual loss, the company has predicted.
Nintendo said on Thursday that its loss will likely be around $264 million. Before a series of fumbles and mistakes, the company had been predicting a profit of around the same amount.
Despite being based in Japan, Nintendo earns around 80% of its entire revenue from the Americas and Europe. As such, the company blamed part of the loss on a worse-than-expected increase in the value of the yen, which means its sales in those territories amounted to less total profit.
But the biggest blunder that led to the poor sales numbers this year was the launch of the Nintendo 3DS.
Nintendo had several missteps with the device, including missing a target launch of Christmas 2010, which would have catapulted holiday sales. Even when it did release the handheld, though, it suffered sluggish sales due to a lack of any strong launch title and the fact that the system wasn’t even truly finished. Nintendo has been updating it with firmware downloads to bring features that it initially said would be ready on day one.
Beyond that, Nintendo also had a poor showing at the big E3 conference, where it showcased a successor to the Wii but was met with confusion and angst rather than the joy and excitement usually met with a new console unveiling.
The company is now forced to cut costs and focus on new strategies to get ahead in the rapidly changing game market.