As expected, Nintendo posted another quarterly loss in their latest financial report, this time to the tune of $220 million from April through June. And again as expected, the shouts of "Smartphones! Smartphones! Smartphones!" can be seen all across the Internet. While their rise have no doubt been a factor, the bigger reasons are falling Wii and DS sales, lack of compelling software to move 3DS units, R&D costs for the upcoming Wii U, and a very bad foreign exchange rate.
But there is good news out of this: Nintendo confirmed that the 3DS, which has sold 19 million worldwide, will now be sold at a profit. Nintendo historically sells hardware at a profit out of the gate. The 3DS was when it first released, but a massive price cut put a red mark in Nintendo's financials. This is a huge step forward for Nintendo getting back to profitability, especially with the upcoming releases of the 3DS XL and New Super Mario Bros. 2.
The remaining unknown factor is the price of the Wii U, which will release this holiday season. Regardless of what it is, it's looking good for Nintendo. They will be kicking off a much-needed new generation of consoles all by themselves with potential hot selling games like New Super Mario Bros. U, Pikmin 3, Wii Fit U and NintendoLand. Video game sales always skyrocket during the holidays, and with a new console release, Nintendo should have no problem getting back in black.
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