Nintendo DS Sales Sink by Half, Intensify Quarterly Loss

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It was inevitable: Nintendo's reporting a substantial loss as sales of its DS gaming handheld fell last quarter, leading the company to a quarterly net loss for the first time in two years.

Nintendo says it lost 25 billion yen ($2.2 billion) during the quarter, which runs from April to June, compared with a profit of 42 billion yen the prior year. According to PC World's Martyn Williams, the sharpest decline was in demand for the Nintendo DS itself, whose sales plummeted by nearly 50 percent to 3.15 million units.

Portable handheld sales were down dramatically in June, with the DS leading the decline: 33 percent, year-on-year, though the handheld was actually up about the same amount in handheld sales (511k) over the prior month (384k). Sony's PSP was off 26 percent, though at 121k units in June, it's monthly sales were a fraction of Nintendo's, a position the beleaguered PSP's been in for years.

If we stick to year-on-year numbers, conventional wisdom holds that revenue fell due to weakening demand for the DS, probably demographic saturation--the company now has three iterations of the DS in circulation--coupled with anticipation for the upcoming 3D version. The other reason is the stronger Japanese yen, which reduced the value of Nintendo's overseas earnings.

Another sales-sinker cited by Nintendo directly was the lack of new games for the DS. The company said the number of new games it launched during the April/June quarter dropped by one-third in Japan, and by a fifth in the Americas, year-on-year. The only notable DS titles released in the U.S. during that timeframe were Picross 3D and Again. The latter was well-received critically, but the latter was panned. Nintendo's Pokemon HeartGold and Soulsilver games, WarioWare D.I.Y., and Square Enix's Dragon Quest IX all shipped before or after the April/June period.

Nintendo has a decent DS lineup for 2010's remainder: Dawn of Heroes (8/17), Harvest Moon: Grand Bazaar (8/24), Professor Layton and the Unwound Future (9/12), Lord of the Rings: Aragorn's Quest (9/14), Final Fantasy: The 4 Heroes of Lights (10/5), Super Scribblenauts (10/12), Rock Band 3 (10/26), and Mario vs. Donkey Kong: Miniland Mayhem (12/1) should help sustain handheld revenue through 2010.

But eyes are already on Nintendo's 3DS, a version of the DS shipping in early 2011 that'll allow 3D play without special glasses.

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