Nintendo's fiscal first quarter results beat analyst predictions, with the company reporting a much lower loss than expected.

Nintendo's fiscal first quarter results beat analyst predictions, with the company reporting a much lower loss than expected.

 
The Japanese gaming giant posted an operating loss of 10.3 billion yen ($131.7 million) for the quarter ending 30 June, half the average forecast of 20.6 billion ($263.4 million) from three analysts cited by Reuters. It was also nearly a third of the 37.7 billion yen ($482 million) it lost at the same time last year.
 
While Nintendo is still losing money currently, the much lower than anticipated loss is a positive sign for the future of the company, which remains the top console seller in the world, despite slowing sales of its Wii motion control system. Nintendo plans to release its successor, the Wii U, later this year, and many believe that this will be the turning point to restore profitability to the company.
 
The success of the Wii U is far from guaranteed, however, with changing gaming habits forcing traditional console makers to re-evaluate the industry. The boom in smartphones and tablets, which are being recognised more and more for their gaming capabilities, is challenging the big names like Nintendo, Microsoft and Sony.
 
 
Wii sales were down from 1.56 million in the fiscal first quarter of 2011 to just 710,000 this year, while DS sales were down to 540,000 from 1.44 million. Despite this, Nintendo expects to sell 10.5 million Wii units and 2.5 million DS devices this year. It also expects a whopping 18.5 million sales of the 3DS by the end of its fiscal year, thanks to 3DS sales jumping from 710,000 last year to 1.86 million this year.
 
According to Reuters, some analysts believe that Nintendo may be forced to offer its popular game franchises, such as Mario and Zelda, on rival consoles and devices, despite their exclusivity being one of the main selling points for the Wii, Wii U, DS and 3DS. 
 
This would see the company following suit with Sega, which shut up shop in the hardware market after the failure of its Dreamcast system at the turn of the century. Sega has since succeeded on software alone, opening its Sonic franchise to many gaming platforms. 
 
Nintendo is in a much stronger position, however, and its ability to turn around initial poor sales of the 3DS shows that it is still relevant in an increasingly mobile-focused society.
 
Source: Reuters