Japan's Nintendo reported a first-quarter loss, lowered its annual forecast and slashed the price of its 3DS handheld console by 40 per cent less than six months after its launch.
The gaming giant booked a net loss of 25.5 billion yen ($327.9 million) for the April-June quarter and cut its forecast for the year to March 2012 to a net profit of 20 billion yen, down 74.2 per cent from the previous year.
Nintendo also said it would slash the price of its 3DS handheld console, released in February, from 25,000 yen to 15,000 yen from August 11 in Japan, to be followed by similar cuts in foreign markets by September.
The 3DS, the world's first video game console with a 3D screen that works without special glasses, globally sold 710,000 units and 4.53 million game titles during the period.
Its price will be lowered to generate "momentum" for the device before the key year-end shopping season, Nintendo said.
Meanwhile, the Wii home console sold 1.56 million units, thanks mainly to price cuts in the European and US markets. But the Wii business also suffered from having a limited number of mega hit game titles.
In the first quarter, Kyoto-based Nintendo -- which like other game makers faces stiff competition from smart phones and tablet computers -- said a limited number of megahit game titles and a soaring yen hurt its earnings.
A surging yen against the dollar, the inventory markdown due to the planned price cuts, global advertisement and promotional costs for the 3DS, plus research and development costs for new products, also weighed on the earnings.
The company lowered its exchange rate projections for the dollar from 83 yen to 80 yen and for the euro from 120 yen to 115 yen. In the first quarter last year, the company valued the dollar at an average of 92 yen.
"These factors considerably decreased profits," Nintendo said.
Nintendo in June announced a plan to launch a Wii U" console in 2012, as the global game sector becomes increasingly crowded with competitors.
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