Nintendo Co., Ltd. (OTCPINK:NTDOF) (TYO:7974) shares plummeted at OTC Markets as the Japanese console maker warned that it expects to post operating losses of $335.2 million for the fiscal year which ends in March. Shares fell as much as 22% at U.S.-based OTC Markets after the warning. They slumped as much as 6% at the Tokyo Stock Exchange as well.
Nintendo previews lower-than-expected results
Charles Riley and Virginia Harrison of CNN Money report that disappointing hardware and software sales during the holiday shopping period account for much of Nintendo’s operating losses. Previously, the company had guided for a profit of $957.7 million. In addition to reporting expected losses for the current fiscal year, Nintendo Co., Ltd. (OTCPINK:NTDOF) (TYO:7974) also reduced estimates for sales of its Wii U console.
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Previously the company had forecast 9 million units, but it slashed that number down to 2.8 million, in spite of its efforts to move more consoles by slashing the price.
Nintendo’s Wii U fails to impress
Consumers haven’t been lured in by Nintendo’s Wii U console, possibly because of the lack of games which are out for it. Also a shift toward mobile gaming could be taking a bite out of Nintendo’s sales as the Japanese console maker struggles to keep up these trends.
Nintendo Co., Ltd. (OTCPINK:NTDOF) (TYO:7974) launched its Wii U console in 2012, but at that time, there were no new versions of its most popular game franchises available. In the 2013 holiday shopping season, there were a few more, including a new Mario 3D World. However, the Wii U faced off with newer consoles from Microsoft Corporation (NASDAQ:MSFT), which released the Xbox One, and Sony Corporation (NYSE:SNE) (TYO:6758), which launched the PlayStation 4 console—both of which came out just in time for the holidays.
Nintendo has continued on its path of console gaming and spurned the mobile trend so far. Although the Wii U does offer many of the same apps as the Xbox One and the PlayStation 4, like Netflix and Hulu Plus, Nintendo Co., Ltd. (OTCPINK:NTDOF) (TYO:7974) hasn’t marketed its console as a total entertainment device like Microsoft and Sony have marketed theirs. This is another trend the company could have taken advantage of but has failed to do so yet.