Nintendo’s Q2 earnings report is in and it’s sombre reading for the company. They’ve posted a loss over the quarter of $258 million compared to a profit of over $400 million in the same quarter last year.
It’s a massive decline for the company but not as tragic as it might seem. This loss for the July-September period means that Nintendo are just breaking even as they head into the holiday sales period. They’re currently supporting a new hardware platform still barely six months old (the 3DS) and preparing to release another one (the Wii U) next year. That’s a challenging situation for any platform holder and it paints a bleak picture when translated to financial reports.
It seems that, along with traditional competition from Sony and Microsoft, the rapid encroachment of Apple and Google on the casual games market is the reason for part of the decline. It should also be noted that a declining economy in markets outside of Japan, where Nintendo does 80 per cent of its business, won’t help when the Yen is so strong.
With the busy holiday season ahead and the arrival of some key titles for the ailing 3DS, Nintendo’s next financial report is of much more importance. That won’t stop this one hurting though, it’s depressing reading for the investors, I’m sure.