Nintendo reports largest shortfall in 40 years

Nintendo announces losses for first half of fiscal year, plans to unveil new device at E3.

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TOKYO-- Nintendo stated today that it suffered a 2.9 billion yen ($26.8 million) loss in the first half of its fiscal year, between April and September 2003. The company previously reported profits of 19 billion yen ($175.5 million) for the same period last year. This is the first time that Nintendo will be in the red for the midterm since it went public in 1962.

Nintendo, which warned in October that it would be going into the red for the first half of its fiscal year, was dragged down by declining sales of the GameCube console prior to lowering its price worldwide. The company's sales figures rose by 1.6 percent to 211 billion yen ($1.9 billion) due to the strong performance of its Game Boy Advance and SP consoles. Although Game Boy sales increased by 44.3 percent to 8.34 million units, the GameCube staggered the company's performance, selling only 890,000 units--a 69.1 percent decline from the same period last year. The console's price cut was announced at the end of September, so the effect will not be seen until the second half of the company's fiscal year. Nintendo also suffered 40 billion yen ($369.6 million) in investment losses due to the yen's rise. However, the company is still sticking to its full-year forecast of a 60 billion yen ($554.3 million) profit, which was announced together with its warning of losses in October. Nintendo reported a profit of 67.3 billion yen ($621.8 million) last year.

In a move toward expanding its target audience, Nintendo will soon be entering the Chinese game market with its iQue Player, which is a low-cost game machine capable of running SNES and Nintendo 64 titles through the use of a proprietary flash-memory card. The company originally planned to release the iQue Player in October but delayed its release in order to make additional preparations. The iQue Player is currently expected to hit retailers in China later this month.

Nintendo also revealed today that it plans to unveil a mysterious new gaming device at E3, which it claims will be neither console nor portable.

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