Nintendo to report struggling first-half earnings

AP News
Posted: Oct 25, 2011 3:23 AM
Nintendo to report struggling first-half earnings

Nintendo Co. reports fiscal first half earnings Thursday that will likely highlight the Japanese game maker's recent struggles against popular mobile devices such as Apple Inc.'s iPhone.

WHAT TO WATCH FOR: Nintendo, which scored success by courting casual gamers, may now be seeing them wooed away by mobile phones and other devices that offer simple games.

Nintendo's Wii home console is losing sales momentum, and its 3DS handheld, which offers 3D gaming without special glasses, has been a relative disappointment since it went on sale in February in Japan and in March overseas.

The surging yen works as a minus for the Kyoto-based manufacturer behind Pokemon and Super Mario games by eroding the value of overseas earnings of Japanese exporters.

WHY IT MATTERS: Nintendo hasn't given up the fight to win back consumers ahead of the key year-end shopping season.

It has slashed the price of the 3DS and is coming out with more games, including 3D versions of its trademark Super Mario games.

It announced recently a software upgrade set for global release at the end of November that will allow users to take 10 minutes of 3D video.

In the U.S., Nintendo is also offering an on-demand service of TV shows and movies for the 3DS and Wii. A similar service has not yet been announced for Japan.

Competition in portable gaming is heating up with the arrival of Japanese rival Sony Corp.'s latest portable offering, PlayStation Vita. Vita goes on sale in Japan on Dec. 17, and early next year in the U.S. and Europe.

Both 3DS and PlayStation Vita face the threat from smartphones and tablet devices that also offer on-the-go games and other entertainment, including social networking.

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Times are changing for Nintendo, once the king of portable gaming _ selling nearly 150 million DS handheld machines since they went on sale in 2004, outpacing the Sony PlayStation Portable, whose cumulative global sales total 71 million.

So far, Nintendo has sold just 4.32 million 3DS machines around the world.

WHAT'S EXPECTED: A FactSet survey of analysts forecasts Nintendo to report a 14.7 billion yen ($193 million) loss for the June-September quarter.

LAST YEAR: Nintendo, which does not break down quarterly numbers, sank to a loss for the April-September period last year, its first in seven years, racking up 2.01 billion yen ($26 million) in red ink for the six months.