Mobile Devices Inflict First Loss On Nintendo
The growing market for games on smartphones, tablet computers and social networking websites has helped push Nintendo to its first ever loss.
The Japanese firm behind the Wii and hand-held 3DS consoles posted an annual loss of £329m.
The figure was worse than many analysts had predicted and the company attempted to put a brave face on the result, insisting it would return to profit this year, helped by a weakening yen and sales of new software titles such as the latest Dragon Quest.
The Japanese currency's strength, along with strong competition from download games to mobile devices, combined to hurt sales over Nintendo's last year - falling 36%.
But the company, which once led the market with the Game Boy and its Super Mario brand, said it expected to sell 18.5 million 3DS devices worldwide in 2012.
That is up from 13.5 million in the business year just ended.
It predicted sales of the DS would shrink to 2.5 million from 5.1 million though the Wii would edge up to 10.5 million from 9.8 million.
Weak demand for the new 3DS, launched in February 2011, forced Nintendo to slash the price of the gadget by about a third in August.
Nintendo is expected to release its successor to the Wii, the Wii U, later this year - six years after the wii hit the shelves.
It will also push its online "Nintendo Network" service, that will link players of the Wii U, which will come with a touch-screen controller, with those of its handheld Nintendo 3DS offering three-dimensional imagery.
Nintendo President Satoru Iwata has repeatedly denied smartphones are a threat to his business.
Analysts believe Nintendo should be putting a greater emphasis on capturing share in the mobile gaming industry.
Guy Cocker, the editor of gamespot.com, told Sky News: "The consoles they put out, the 3Ds is doing better than it was this time last year.
"But the Wii's been out for a number of years now. It's just not been selling as much as it used to."
"Japanese companies in general are having a bit of a problem. You look at Sony. They're having real problems too in terms of their profits."
He added: "Nintendo needs to do something and its answer is it's going to bring out a new console at the end of the year."