Nintendo share profits plummet after annual forecast revised downwards
After announcing that they would be cutting their Wii U games console sales projections by 69 percent, and revising their annual forecast, Nintendo's shares plummeted as much as 18 per cent over the past days.
Nintendo now expects an operating loss of 35 billion yen ($335.7 million), compared with an initial forecast for a 100 billion yen profit.
The news understandably shook investors, and prompted frantic trading on stock markets.
The company was hoping to sell 9 million Wii U units between April 2013 and March 2014, but with its new forecast they expect to sell just 2.8 million units.
Wii U software sales have also been revised with Nintendo now saying that it expects to sell 19 million units, rather than the 38 million they initially expected.
The reason for the drop in sales according to experts is that the company has been slow in expanding into increasingly popular online gaming and entertainment-based features, and allow its games to be played on consoles built by competitors.
Nintendo’s closest competitors, Sony and Microsoft sales seem to have been going well.
Sony’s PlayStation 4 console sold more than 4.2 million units by the start of the year - PS4 was the best-selling console in the UK last year - while Microsoft's Xbox One sold more than one million units in the first 24 hours after its release last November.
If sales of the Wii U have been sluggish, Nintendo’s 3DS was declared the best-selling gaming system in 2013 in the U.S., but the company has also revised its 3DS hardware and software projected sales downward.
Nintendo now expects to sell 13.5 million 3DS when it previously expected to sell 18 million, and software sales are also expected to follow the downward trend, from 80 million units to 66 million.
According to Reuters, this will mark the third year in a row in which the company has reported a loss.