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| Nintendo shares tumble 13% after company reports a loss | |
| (about 4 hours later) | |
| Shares in Nintendo have tumbled on the Tokyo stock exchange a day after the company announced a loss in the first quarter. | |
| The shares closed down 13%, having fallen as much as 20%, on news of the worse-than-expected profits figures. | |
| On Thursday, Nintendo reported a net loss of 25.5bn yen ($324m, £201m) for the April-to-June quarter, its first-ever quarterly loss. | On Thursday, Nintendo reported a net loss of 25.5bn yen ($324m, £201m) for the April-to-June quarter, its first-ever quarterly loss. |
| The company also cut its full-year profit forecast. | The company also cut its full-year profit forecast. |
| Nintendo said it now expects a net profit of 20bn yen for the year to March 2012, down 82% from its previous projection. | Nintendo said it now expects a net profit of 20bn yen for the year to March 2012, down 82% from its previous projection. |
| 'Underweight' | 'Underweight' |
| Nintendo earnings were hit by weak sales of its new gadget, the handlheld 3DS console. | Nintendo earnings were hit by weak sales of its new gadget, the handlheld 3DS console. |
| In an attempt to boost sales the company has announced huge price cuts. | In an attempt to boost sales the company has announced huge price cuts. |
| The price in Japan will be about 40% less - retailing at 15,000 yen. In the US, the price will drop next month to $169.99 from $249.99. | The price in Japan will be about 40% less - retailing at 15,000 yen. In the US, the price will drop next month to $169.99 from $249.99. |
| However, analysts said the price cut may hurt the company's earnings even further. | However, analysts said the price cut may hurt the company's earnings even further. |
| "The timing of the 3DS hardware price cut is surprising, given the major in-house software releases," said Hiroshi Kamide of JP Morgan. | "The timing of the 3DS hardware price cut is surprising, given the major in-house software releases," said Hiroshi Kamide of JP Morgan. |
| "We believe the 3DS will be a heavy weight on earnings over the medium term," he added. | "We believe the 3DS will be a heavy weight on earnings over the medium term," he added. |
| JP Morgan also cut its rating on Nintendo from "overweight" to "underweight," saying the current situation was worse than feared and the outlook uncertain. | JP Morgan also cut its rating on Nintendo from "overweight" to "underweight," saying the current situation was worse than feared and the outlook uncertain. |
| Tired customers? | Tired customers? |
| To make matters worse for the gaming giant, industry watchers say sales of the 3DS are unlikely to turn around anytime soon. | To make matters worse for the gaming giant, industry watchers say sales of the 3DS are unlikely to turn around anytime soon. |
| "Software is a big problem. Right now there are not many games available for the 3DS," said David Abrams, of CAGCast Video Game. | "Software is a big problem. Right now there are not many games available for the 3DS," said David Abrams, of CAGCast Video Game. |
| Mr Abrams added that while the 3DS has had a lukewarm response, smartphones continue to capture an increasing share of the gaming market. | Mr Abrams added that while the 3DS has had a lukewarm response, smartphones continue to capture an increasing share of the gaming market. |
| He said easy availability of games and their low cost meant more and more people were preferring smartphones over specialised gadgets. | He said easy availability of games and their low cost meant more and more people were preferring smartphones over specialised gadgets. |
| "The question is, are people willing to spend a premium to play the next Mario game or would they spend that amount to buy close to 40 games on their smartphones," he said | "The question is, are people willing to spend a premium to play the next Mario game or would they spend that amount to buy close to 40 games on their smartphones," he said |
| Mr Abrams added that despite the launch of its latest version, the DS gadget has been losing its charm. | Mr Abrams added that despite the launch of its latest version, the DS gadget has been losing its charm. |
| "The reality is that people may be tired of the whole DS concept. It has been around for almost seven years," he said. | "The reality is that people may be tired of the whole DS concept. It has been around for almost seven years," he said. |
| "May be its not that exciting to people anymore," he added. | "May be its not that exciting to people anymore," he added. |