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Nintendo’s losses are bad news

Published 5:41pm Saturday, May 10, 2014

The House that Mario built is still in the red. That could have an adverse affect on gaming in general.

On Wednesday, Nintendo posted an operating loss of $457 million for the fiscal year ending in March, the third consecutive year it has done so. The company also posted a net loss of about $228 million over the past fiscal year, compared to last year’s $71 million in profit.

This is a tough spot for Nintendo to be in, though it’s no surprise in an industry that’s in continuous financial flux. Though there are some healthy companies that reap the rewards of billon-dollar franchises like “Call of Duty,” the gaming industry as a whole is moving toward higher-end titles, and fewer at that, in an effort to recoup money. Many companies, from Square to Capcom, have felt the heat of declining revenues and forecasts that have failed to live up to expectations. But no company has quite as much skin in the game as Nintendo.

Nintendo is still an oddity in the gaming industry, as it still produces its own hardware — the Wii U and 3DS are Nintendo’s focal points on that front — along with its games. It has successfully weathered the era when Sony and Microsoft entered and took control of the console market. Unlike those companies, however, Nintendo doesn’t have many outside divisions to fall back on when its games and consoles aren’t selling to expectations.

Nintendo is by no means a dying company, however. Despite abysmal Wii U sales, there’s still a lot of potential for the console. “Mario Kart 8” will be released at the end of May, which is an almost guaranteed spike in sales for Nintendo. The company hopes to sell about 3.6 million Wii Us and 12 million 3DS units over the 2014 fiscal year, both forecasts which on the surface are doable but seem a little high given Nintendo’s track record over the past few years.

There’s at least one more first-party title, “Super Smash Bros.,” that could move Wii Us out of stores this year, and if Nintendo executives are smart they’ll have a solid lineup of games to display at the E3 conference next month. Nintendo arguably stole several trade shows last year with big announcements on titles like “Donkey Kong Country: Tropical Freeze” and “Mario Kart,” but let’s hope developers can deliver on more titles over the next few months.

And gamers should hope for Nintendo’s success. It’s still an anomaly in the gaming industry, and it allows for more creative approaches to games. It gives an alternative to an industry that is showing signs of a creative drain due to an increasing emphasis on blockbuster titles.

Nintendo doesn’t have a commanding presence on the market like in the last console generation — at more than 6 million Wii U units sold since late 2012, the Playstation 4 has already caught up to Nintendo’s console sales in a few months. Here’s hoping the company can make the right decisions to thrive in the market once more.


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