Nintendo has generally been the sole console maker to post significant profits in the gaming space, a fact that no doubt had much to do with Nintendo's insistence on actually making money on its hardware, as opposed to taking a loss in service of making up the money later in game sales. Unfortunately, 2011 marked a shift for Nintendo in regards to profitability. Specifically, it marks a shift away from profitability.
Nintendo posted a $461.2 million (¥37.3 billion) loss for its fiscal year in 2011, which officially ended on March 31. That came from an overall net sales number of $8 billion (¥647 billion) on the year.
One of the key contributing factors to the loss was the 3DS price drop. The $170 price point for the system put Nintendo in the red on each unit sold. The company believes that by the end of its next fiscal year, it should be seeing a profit on all 3DS units sold, presumably through decreased manufacturing and component costs.
The company's effort to increase 3DS software sales was deemed "successful" according to the report, but not quite successful enough to offset the loss on each 3DS sold, as well as the reduced price of the Wii, which now retails for $149.99.
This isn't a position we're typically accustomed to seeing Nintendo in, but it's not all doom and gloom, either. Nintendo has a number of significant games coming up for the 3DS, and there is, of course, the impending Wii U launch. We don't yet know how Nintendo will price its new console, but it wouldn't be crazy to assume that the company will look to make some money out of the gate from hardware sales there. Question is, can they make money on that system while still keeping the price reasonable for consumers? If any of the current rumors circulating around are true, then that doesn't sound too far fetched. Guess we'll find out at E3.