updated 06:05 pm EDT, Wed October 26, 2011
Nintendo may lose 1.32b based on Android
Nintendo might post a loss for the first half of its fiscal year twice as high as what it predicted, Japan's Nikkei newspaper said Wednesday [subscription required]. The game console maker is expected to face a $1.32 billion loss for the period between April and September, nearly twice the $722.4 million it had estimated. Some of the loss would come from a $525.38 million foreign exchange difference given its dependency on North American and European sales, but most would come from poor performance.
The drop hadn't been directly confirmed by Nintendo but led to a sharp 7.5 percent fall in Nintendo's shares in Japan.
Most of the decline has been widely attributed to heated competition coming from smartphones and MP3 players, led mostly by Apple. Sales of the DS had been on the decline since 2010 to where they're now outsold by the Xbox 360, and the 3DS struggled through most of its first few months on sale. It wasn't until a large price cut that the 3DS started overtaking its predecessor.
The game platform in the past few years has been challenged by a combination of much more aggressive hardware updates from Apple and Google's partners as well as much cheaper games. Nintendo is used to often launching significant updates to its handhelds only every few years where iOS and Android devices are updated at least once a year. Games for the DS and 3DS are more in-depth but often cost $30 or $40 where many phone games cost no more than $10 and often much less.