Nintendo today warned it would swing back into the red this fiscal year as the Japanese gaming giant slashed its sales target for the Wii U console, blaming poor sales over the key holiday season.
The dramatic downgrade stands in marked contrast to rivals Sony and Microsoft which have seen huge demand for their new consoles as the firms battle for control of a sector worth about USD 44 billion annually.
Nintendo said today it expects a loss of 25 billion yen (USD 240 million) in the year to March, reversing an earlier 55 billion yen net profit forecast, while annual revenue would drop 36 per cent.
The company, maker of the Donkey Kong and Super Mario brands, also said it expected to sell just 2.8 million units worldwide of the Wii U, less than a third of it earlier prediction for 9.0 million consoles.
Nintendo's hopes for big holiday season demand to boost flagging sales were dashed, forcing it to chop forecasts as demand for the Wii's high-margin software slumped, it said.
"During the year-end shopping season, we weren't able to lift sales momentum for the Wii U," Nintendo President Satoru Iwata told a press briefing in Osaka.
"The decrease in game software sales is having the biggest impact" on profit, he added.
Demand was weak in the crucial European and US markets, Iwata said as he apologised to shareholders.
"My duty, more than anything else, is to revive our business momentum," he said.
Nintendo's Tokyo-listed shares ended down 2.75 per cent at 14,645 yen today, before the firm made its announcement.
The firm's revised figures came as key domestic rival Sony saw record demand for its new PlayStation 4 console, which had already sold more than 4.2 million units by the start of the year.
The console was launched on November 15.
US rival Microsoft has also seen robust demand for its Xbox One console, which sold more than one million units in the 24 hours after its November release.
For Nintendo, the grim forecast is especially disappointing after it scratched back to profitability last year thanks to a sharply weaker yen, which inflates Japanese firms' repatriated profits.
The company has previously blamed weak earnings partly on high development and marketing costs for the Wii U, although sales of its 3DS handheld console and related game titles fared better.
