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Nintendo Records a Loss as DS Sales Plummet

Nintendo reported a net loss for the April to June quarter as the strong Japanese yen and weak demand for its products hurt earnings.

The Kyoto-based maker of the Wii game console and the DSi handheld game console said it lost ¥25 billion (US$2.2 billion as of the last day of the period reported) during the quarter, against a ¥42 billion profit a year earlier. Sales fell by a quarter to ¥189 billion.

The sharpest decline was in demand for the Nintendo DS, of which global sales dropped by almost half, to 3.15 million units during the period.

The number of new games launched for the handheld in the quarter dropped by a third in Japan and by a fifth in the Americas, when compared to the year-earlier period, and that led to the weak sales, Nintendo said.

Nintendo has revised and relaunched the handheld several times when demand has begun to wane, and this time is no different. A new version of the DS featuring a 3D display that can be viewed without glasses is scheduled to go on sale by the end of March 2011. The Nintendo 3DS was unveiled at the E3 gaming show in the U.S. and received positive reviews from those that played with it.

Sales of the Wii console were up overall, but demand varied by region. Sales more than doubled in the Americas, but were down in Japan, Europe and Australasia. Globally, the strong American sales helped push total Wii sales up by a third to 3 million units.

Nintendo left its full-year targets unchanged despite the quarterly loss. The company hopes to realize a profit of ¥200 billion on sales of ¥1.4 trillion. Those targets represent drops of 12 percent and 2 percent on actual results for its fiscal year ending March 31.

Martyn Williams covers Japan and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com

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