Nintendo posts first six-month loss in seven years

By Aemon Malone October 28, 2010

Up until recently, it was reasonable to say that the last few years had been relatively kind to Nintendo. The Japanese company’s Wii gaming console was a hit among demographic groups ranging from kindergartners to nursing home residents, and the DS was a solid performer in the mobile gaming market. However, if the last six months are any indicator, the company may be facing some tougher times heading into 2011.

Nintendo today announced that it withstood a net loss of $24.7 million (2.01 billion yen) during the six months stretching from April through September of this year. That is Nintendo’s first interim net loss in seven years, according to the Wall Street Journal. That compares with a profit of around $850 billion over the same period a year prior. Revenue fell by 34% to $4.5 billion, down from $6.7 billion over the first half of the previous fiscal year.

Nintendo, which largely relies on sales from its exports, was quick to point out that the some of the losses can be attributed to having to deal with a strong domestic currency. The yen is clearly not the sole reason for the troubles though. Both the Wii and the DS have seen significant drops in sales recently.

Part of the problem lies in aging hardware that’s failing to attract big-time developers capable of sustaining interest in the products. After enjoying a period of popularity, interest in the Wii has begun to wane and has largely failed to keep pace with competing consoles from Microsoft and Sony. Now Microsoft and Sony are piling on by releasing their own versions of motion-controlled gaming hardware, technology that contributed to the Wii’s initial widespread appeal.

If there’s a bright spot for Nintendo, it’s that there’s a good amount of positive buzz surrounding the upcoming mobile 3D gaming console, the 3DS. But even that has been a bit of a sore point for Nintendo who has delayed releasing the portable console until early 2011.

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Nintendo’s eShop closures are a necessary, but messy move

A Nintendo Wii U gamepad flat on a table.

Nintendo last week announced its intentions to shut down the Wii U and 3DS eShops, the systems' digital storefronts, in March 2023. This decision was disappointing for hardcore fans who stuck with Nintendo during that rocky era and extremely worrying as many of the games available on the platforms won't be preserved.
More significant Wii U games and a handful of 3DS titles were ported to Switch, but many titles are still stuck on those systems and can’t be ported. Once the digital storefront shutdowns, digital-only titles will be gone forever, and physical copies of these titles will get more expensive and harder to experience. Fans and game preservationists have not been pleased by this decision, with the Video Game History Foundation giving the most candid response.
https://twitter.com/GameHistoryOrg/status/1494398068346654720
Following this announcement, Digital Trends spoke to an industry analyst and game preservationists to get a better idea of what exactly caused Nintendo to shut down these stores and to learn how it could do a better job at preserving its legacy.
Why is Nintendo shutting down the 3DS and Wii eShops?
Officially, Nintendo’s FAQ on the eShop closures says “this is part of the natural life cycle for any product line as it becomes less used by consumers over time." The answer doesn’t get into specifics and might confuse those still playing games on the system or fans of games only available on Wii U or 3DS. Omdia Principal Analyst Matthew Bailey explains Nintendo’s user base argument in more detail, highlighting the massive gap between the number of people playing the Switch as opposed to the Wii U.
“While Omdia expects the number of Switch consoles in active use to exceed 90 million on a global basis this year, the Wii U’s global active installed base will drop under one million in 2022,” he explains. “Even when you include the more enduring 3DS family of consoles into the equation, the Switch still comfortably accounts for over 90% of Nintendo’s total active console install base.”
If one is going off just the numbers, it’s sensible that Nintendo would want to focus on the majority of its players. Bailey admits that “Switch users are already reaping the benefits of Nintendo’s singular first-party development focus on one platform.” Still, one might argue that Nintendo should just let the eShops remain up even if it isn’t actively updating or maintaining them.

Unfortunately, Nintendo doesn’t see that as possible due to cost and security issues. Game Over Thrity, a Twitter user with over 20 years of experience working on IT projects and infrastructure, shed some light on what might have influenced Nintendo’s decision-making in a thread.
“As these systems age, they require patches, security, special contracts, updates, and personnel that know how they were built (and maintained),” his Twitter thread explains. “As time goes on, there are security holes, servers, code, infrastructure, etc., that can’t be brought up to modern standards. It becomes a constant struggle between maintaining legacy systems, paying people to do so, and trying to keep up with global regulations. It’s not cheap by any means. They can’t just ‘leave the lights on’ and stop supporting them. What if someone hacked the payment processor?”
With every passing year, the Wii U and 3DS eShops likely became more expensive to maintain and an increased security risk for the video game publisher. Instead of investing the time and resources into pleasing a smaller amount of players, the easier option is to turn everything off entirely. While he isn’t affiliated with Nintendo, Game Over Thirty’s assessment aligns with what we’ve heard from Nintendo and Omdia.
"The Wii U’s global active installed base will drop under one million in 2022."

Gaming

Nintendo is ending Wii U and 3DS eShop service

Photos of the 3DS eShops

Nintendo has announced the end of its eShop service for the Wii U console and 3DS handheld. The eShop will stay live on those devices until late March 2023, after which players will no longer be able to purchase games or download eShop apps and services for those devices.

After the closure, players will still be able to redownload games and DLC that they already own, use online play, and download software updates.

Gaming

Nintendo 2DS XL vs. Nintendo 3DS XL

new nintendo 2ds xl review 13703

Although the Nintendo Switch poses as a great portable console and reigns supreme in popularity, Nintendo isn't ready to let their handheld consoles fall to the side. Since the Switch's release, the 3DS has gotten a plethora of great games, including Metroid: Samus Returns, WarioWare Gold, Luigi's Mansion,Pokémon Ultra Sun and Ultra Moon, Mario & Luigi: Superstar Saga + Bowser's Minions, and Hey! Pikmin.

It wasn't a total surprise when Nintendo announced a new 3DS to add to their family of portable consoles. The Nintendo 2DS XL was announced just months after the initial release of the Switch. Additionally, Nintendo continued to provide support for its 3DS platform. Those of us who are in love with the Nintendo handheld consoles have a chance to continue to pick up these systems and find new games to explore.