Nintendo has announced its first annual operating loss following an initially lukewarm response to its new 3DS handheld and an aging Wii console -- set to be replaced later this year. Nintendo made an operating loss of 37.3 billion yen ($459.54 million) from 2011 to 2012, but intends to spin it around to a 35 billion yen operating profit in the forthcoming year. Net sales dropped by 36.2 percent compared to 2010-2011 , despite price cuts on its existing hardware like the 3DS and Wii. The Japanese games manufacturer has also seen increased competition from new rivals on Apple and Android hardware, as mobile gaming continues to go from strength to strength.

Nintendo also laid some of the blame at the feet of the weakened yen, but expects the incoming Wii U, cheaper 3DS production and incoming titles like New Super Mario Bros. 2, Brain Training and Animal Crossing will all help turn its fortunes around. Nintendo intends to stop selling the 3DS "below cost" (that is; at a reduced manufacturing cost) by the middle of the next financial year, after strong sales from the substantial price cut last year. The company sold 13.53 million 3DS devices and 36 million 3DS games, compared to 80.2 million on the original DS. The original DS still managed to sell 5.1 million units in the last year. Nintendo's main console, the Wii, sold 9.84 million units in the last year, with 102.37 million games sold.

Nintendo posts first annual loss of $460 million, predicts turnaround next year originally appeared on Engadget on Thu, 26 Apr 2012 03:37:00 EDT. Please see our terms for use of feeds.