Nintendo posts rare quarterly loss as sales sink over 25%

Ever since the Wii launched in November 2006, Nintendo has posted quarterly profit after quarterly profit.

No longer.

For the three months ending June 30, 2010, the company reported a rare loss of 25.2 billion yen ($288.3 million), versus a profit of 42.3 billion yen ($484.8 million) the year prior. Net revenues were 188.6 billion yen ($2.16 billion), a 25.6 percent decrease from the year before.

In a supplemental statement, Nintendo said that the reason for the decrease was falling sales of DS hardware and DS and Wii software. The strengthening yen was also a major factor, since it decreased the value of the Kyoto, Japan-based game giant's prodigious overseas income, which accounts for 86.5 percent of its overall sales. As a result, the company estimated its foreign exchange losses were 70.5 billion yen ($808 million), eating up most of its profits and pushing its ledgers into the red.

Contrary to many analyst reports, the company said global sales of its Wii hardware actually increased during the three-month period to 3.04 million, with 28.17 million Wii games purchased. The console has now sold 73.97 million units worldwide, far ahead of its rivals the PlayStation 3 and Xbox 360, with some 165 million Wii games sold as of June 30, 2010.

The DS has now eclipsed 132 million units of hardware sold, with a whopping 740.93 million DS games sold internationally as of the end of June. However, Nintendo said "fewer new software titles contributed to driving hardware sales," so just 3.15 million members of the DS suite of portables were sold April-June period, along with 22.42 million games.

Nintendo also offered updates on some of its latest software releases. Super Mario Galaxy 2, which launched in North America on May 23, has now sold over 4.09 million units. The game was enthusiastically embraced by review outlets, including GameSpot, which gave the game a perfect score of 10.