Nintendo: First annual loss, thanks to 3DS | EW.com

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Nintendo announces first-ever annual loss, blames declining portable sales

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For the first time in three decades – for the first time in videogame history, really – Nintendo is reporting an overall annual loss for fiscal-year 2011. According to Bloomberg, part of the blame goes to the general state of the world economy. But perhaps more intriguingly, the company also claimed that their lucrative portable-games corner was underperforming, saying in a statement: “Sales of Nintendo DS hardware and Nintendo 3DS software were weaker than expected.” It’s no secret that the much-ballyhooed 3DS has been a sales disappointment – Nintendo already slashed prices for the extra-dimensional device in August. But it’s intriguing to hear that sales of the DS hardware might be hitting a wall.

The DS has been minting money for Nintendo for the last half-decade, helping to foment the casual-gamer revolution. (It’s a mere three million units away from becoming the best-selling console ever.) It could be evidence that the Angry Birds era of smartphone/tablet games will make portable consoles like the DS a thing of the past.

Nintendo has a big year ahead. Next month sees the arrival of the newest incarnation of Legend of Zelda, which has earned rapturous reviews from British people. And next year, Nintendo will kick off the next generation of videogame consoles with the Wii U. They’ll probably be fine. But this is a little bit like that moment in 2005 when Pixar had to trim its annual forecast because of lower-than-expected DVD sales of The Incredibles. That apparent aberration was an early indication of the collapse of the DVD market. Might something similar be happening with portable consoles? Will Nintendo suffer from the casual-gamer culture it helped create? Time will tell.

Follow Darren on Twitter: @EWDarrenFranich

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