Nintendo shares slump after loss

29 July 2011 Last updated at 07:17 GMT Nintendo's latest gadget the 3DS has not made a big impact on the market 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.

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.

'Underweight' 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.

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.

"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.

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?

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.

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.

"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.

"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.

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Duke Nukem back after 14 years

By Dan Whitworth
Newsbeat technology reporter Duke Nukem Forever has been in development for 14 years Duke Nukem was one of the first big name characters in the video games industry - and now he's back.

The sexist, cigar smoking, alien-stomping Duke won millions of fans thanks to three big selling games in the 1990s.

Development on the new title started way back in 1997 but has only just come out.

The competition it faces is very different to 14 years ago, but Randy Pitchford, the game's executive producer, is confident Duke Nukem Forever can attract new fans as well as hold on to old ones.

'Icon and legend'

"Somehow he's become very important to the video game industry," says Randy.

Twenty-one-year-old gamer James won't be buying the new Duke game

"He's become an icon, a legend, an internet meme."

But if he thinks it's going to be easy to win over the current generation of gamers he may be disappointed.

James Matthews, 21, from Birmingham, is one of those who won't be buying the new game.

"I know what it is but I haven't heard a lot about it," he says. "I didn't know it was coming out.

"I like sporty games, Call of Duty games, that's all I really play."

Another question mark facing the game is whether or not it can compete with the rivals it's going to face in 2011.

There will be the question of whether the technology is as up-to-date as gamers demand, if the graphics are as good as will be expected, and if the plot provides something people want to engage with.

Producer Randy Pitchford told Newsbeat the new game would definitely be up to modern technical standards: "The software behind it is very sophisticated, very advanced stuff.

"It's absolutely a triple A, modern, advanced game for this era."

Michael Detores, 28, is another gamer who's unsure about whether it can live up to the years of expectation.

"It's been a long wait," he says.

"I don't think it's going to be worth it because is it going to be able to compete with things like Battlefield and Call of Duty?

"The answer, in my opinion, is no."

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