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Nintendo vows return to profitability as giant confirms $229 million loss in 2013

Nintendo vows return to profitability as giant confirms $229 million loss in 2013

The bad news for Nintendo continues unabated, with the Kyoto-based giant today confirming operating losses of ¥‎23.2 billion (around $229 million) for its FY13 financial year, the 12 months ending 31 March 2014.

In stark contrast to the ¥‎7.1 billion profit made in FY2012, the results still mark a better-than-expected performance after a profits warning in January caused shares to plummet 18 percent.

The news comes as president Satoru Iwata attempts to soften the blow with a forecast of full-year profits of ¥‎40 billion ($394 million) for financial year ending 2015, describing the figures as "somewhat conservative ".

The forecast anticipates increased sales on the back of new-releases set to include Pokémon, Super Smash Bros., and Mario Kart 8.

Falling Sales

However, commentators have been quick to suggest the company must now re-examine the ability of the Wii U to buoy its sales figures.

Nintendo's own projections see an increase in Wii U sales figures of 3 percent for FY2014, but with today's figures showing a decline of 10 percent from FY2012, down to ¥571.7 billion ($5.6 billion), the company faces an uphill struggle to hit such targets.

The 3DS has seen a similar decline in sales from 13.95 million units in FY2012, to 12.24 million - a factor that is likely to trigger further demands for Nintendo to begin leveraging mobile.

3DS sales are slowing

What many see as an easy option for a return to profitability has been staunchly rebuffed by Iwata, however. He was clear in his refusal to usher in a 'pay-for-jumps' porting mandate, stating, "simply releasing our games just as they are on smart devices would not provide the best entertainment for smart devices, so we are not going to take any approach of this nature."

Speaking to Bloomberg's BusinessWeek, Ban Bajarin, analyst at Creative Strategies, argued that Nintendo's intransigence on the issue shows that Nintendo is "essentially a hardware company that makes software to sell the hardware."

While many may dispute this, the idea of Nintendo's life-raft approach to hardware was given serious consideration by PocketGamer.biz last year.

[Sources: Bloomberg / BusinessWeek]

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