Japanese videogame giant Nintendo on Wednesday slashed its annual net profit forecast by 70 percent and said it remained in the red as it gets set to launch the revamp of its ageing Wii game console.
The Kyoto-based firm blamed a host of factors on its slumping outlook including a strong yen, price cuts, and weaker-than-expected sales for its consoles and software, which includes the Super Mario and Pokemon brands.
Last year, the firm chopped the price of its Nintendo 3DS console -- the world's first video games console with a 3D screen that works without special glasses -- after a lacklustre debut as it struggled to boost Christmas sales.
On Wednesday, Nintendo said it now expects a net profit of 6.0 billion yen ($75 million) for the year to March, sharply lower than its earlier forecast of 20.0 billion yen, on sales of 810 billion yen, down from 820 billion yen.
It also posted a 28 billion yen net loss for the six months through September, sharply lower than the 70.27 billion shortfall in the same period a year ago.
First-half sales were down 6.8 percent to 200.99 billion yen, it said.
"Sales of the Nintendo 3DS hardware and software were weaker in overseas markets than expected", the company said in a statement.
Nintendo said software sales came in at 104.7 billion yen during the first half, compared with 125.5 billion yen in the same period last year.
Hardware revenue was higher at 95.6 billion yen from 89.6 billion yen in the year-earlier period.
Nintendo lowered its sales forecast for the 3DS to 17.5 million units in the current fiscal year, down from an earlier forecast of 18.5 million units, and said it aimed to sell 5.5 million units of the new Wii U by the end of March.
The company has struggled in the face of competition from not only its traditional rivals such as PlayStation maker Sony but also from inexpensive online games that can be downloaded to smartphones and tablet computers.
The challenging environment saw the firm post its first annual loss since becoming a public company in its fiscal year to March, blaming a soaring yen and price cuts on its consoles for sinking it 43.2 billion yen into the red.
Japan's exporters have been hit hard by the strong currency, making their products pricier overseas while shrinking the value of repatriated foreign income.
Nintendo has announced that its next-generation Wii U videogame consoles will hit the key US market in late November with a starting price of $300, as it looks to cash in on the Christmas rush.
The company last year slashed the price of the Nintendo 3DS by about 40.0 percent in Japan, followed by similar reductions overseas.