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Nintendo Reports First Major Quarterly Loss, iPhone is to Blame

Posted in News on 26/01/2012 by J. Glenn Künzler

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Gaming giant Nintendo reported their first ever major drop in quarterly profit this morning, and expects an even larger full-year loss to come. The decrease is mainly due to Nintendo’s increasing struggle to remain relevant as mobile devices like the iPhone continue to take gaming by storm.

Reuters reports:

Nintendo Co Ltd posted a sharp drop in quarterly profit and forecast a bigger-than-expected full-year loss, its first at an operating level, as it battles a strong yen and its games devices lose ground to gadgets such as Apple’s iPhone.

The creator of the Super Mario franchise dominated the video games industry for years with its DS handheld players and Wii home consoles, but is now struggling to keep up as more versatile smartphone and tablet sales boom.

The company now expects an annual operating loss of a massive $575 million, marking an end to the growth of console gaming, and the beginning of the end of console gaming as we know it.

Nintendo now expects an annual operating loss of 45 billion yen ($575 million), dwarfing expectations of a 4.2 billion yen loss, based on the average of 21 analyst forecasts.

It’s hardly surprising, however. While Nintendo does have plenty of unique titles to keep consumers’ interest, there are likeqise a large number of unique and high quality games available on iOS and Android, and considering that console games can cost $40-60, compared to an average well below $10 on mobile platforms (on devices that many people would own anyway), it appears that people are voting with their wallets.

If only Nintendo would face the music and start making Nintendo’s great games available on iOS and Android instead of focusing on their own proprietary hardware, maybe they could turn things around.

Round one goes to mobile devices. Your move, Nintendo.

  • Anonymous

    I completely respect Nintendo for holding strong to their own platform.  There is a lot of honor in sticking to your own hardware and not letting anyone push you around.  Nintendo DEFINED the gaming industry.  Unfortunately, “defined” is past tense.  

    I would respect Nintendo even more for sucking up their pride and re-releasing all their old hits for iOS devices.  The fire this would reignited in the adults born in the 1980′s would be amazing.  I would again, dedicate hours of my life playing Super Mario Bro.s on the iPad, or iPhone.

    Please Nintendo, do not fail us now.  The numbers are undeniable.  Please, port your games to iOS!

    • Anonymous

      Porting their old gmaes to iOS would not even remotely make up for the losses. 

      • Bandersnatch78

        If Angry birds can generate $100 million alone, imagine how much Nintendo can make porting Super Marios Bros and Zelda??? It’s getting pretty ridiculous. The Nintendo library is a fucking goldmine.

        • Anonymous

          Name a game besides Angry Birds that sold that much. 

          Super Mario 3D Land has already generated $100 million. In iOS, it would take YEARS to generate that much. SM3DL did it in two months. Mario Kart 7 and Zelda: SS are on their way as well. $100 million in revenue from a game isn’t a big deal to Nintendo.

          Besides that, platformers aren’t ideal for touch controls, and there’s no way Nintendo would sell those games for $.99. 

          iOS is not a goldmine. The average iOS game generates $300. The games that succeed are the games tailored for the platform. Nintendo would do better than most, but old ports are not going to generate $850 million in revenue in one year.

          • Anonymous

            I did not suggest Nintendo would make up the difference.  I simply suggested they are missing out on ANY money by not porting their older games.

            I’m pretty sure, I’m not interested in playing Ocarina of Time on my iPhone, but you better believe I’d play Mario, especially with this controller (concept only) http://www.mactrast.com/2012/01/awesome-new-concept-product-turns-your-iphone-into-an-nes-controller/

          • Anonymous

            Fine, but what if it ends up hurting 3DS sales? If that happens, they’ll end up losing more money than they gain. It’s a risk that most likely would not work out for them. Risking your main source of income for a few million dollars in revenue is not good business. 

            Nintendo should instead try to use mobiles as a marketing tool. They should make an eShop app that has videos of their games and links to your Nintendo Network account to let you buy games for your 3DS (or Wii U in the future) from your phone or tablet. That’ll bring long-term profit.

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J. Glenn Künzler

Glenn is Managing Editor at MacTrast, and has been using a Mac since he bought his first MacBook Pro in 2006. Now he's up to his neck in Apple, and owns an old iBook, a 2011 MacBook Pro, a MacBook Air, a third-generation iPad, 2 iPhones, and a Mac Mini that lives at the neighbor's house. He lives in a small town in Utah, enjoys bacon more than you can possibly imagine, and is severely addicted to pie.