Nintendo warns of first ever loss

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Nintendo warns of first ever loss

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Nintendo says it will post its first ever annual net loss this financial year — of around 188 million euros.

The soaring value of the yen against other currencies and weak software sales led it to cut its earnings forecast for a second time.

The former games industry champion — which created the Super Mario franchise — dominated the industry for years but has now fallen behind competitors.

This year’s failed launch of its 3DS handheld games player forced Nintendo to slash prices, crushing its profit outlook for the year.

Nintendo has chopped its forecast for sales of 3DS software by 30 percent to 50 million units for the year to March, but left its 3DS hardware forecast at 16 million units for the year, a target fund managers said might be hard to achieve.

“I think its highly optimistic,” said Yuuki Sakurai, president of Fukoku Capital Management in Tokyo. “I think they need to change their strategy drastically.”

“Now that people can do so much on their smartphones, will they want to buy a games machine?” he said, adding that global economic uncertainty would also likely weigh on the stock.

Nintendo has been battling competition from traditional rivals Microsoft and Sony while Apple and Google are also making rapid inroads into the casual gaming market.

The Kyoto-based company, which generates 80 percent of its sales overseas, also faces a massive hit in earnings from the soaring yen, which has crushed the value of profits repatriated from abroad, especially from the euro zone.