Nintendo Hits a Rough Patch Due to Slowed Hardware Sales

Nintendo's second quarter financial report reads something like this: 'Thank you investors! But our revenue growth is in another castle!' The game company reported 84.8 billion yen (or about $1.08 billion) in revenue during its second fiscal quarter of 2012, which is a lot of money, but also representative of a 9.7 percent drop from the 93.9 billion yen it collected in the same quarter one year prior. All told, the numbers added up to a net loss of around $220 million.

Decelerating hardware sales are largely to blame. Nintendo said it sold 710,000 Wii consoles last quarter, which is less than half of the 1.6 million units it moved one year ago. The company's 3DS sales didn't fly off the store shelves, either. Nintendo said that "although the sales in Japan were robust, [3DS] hardware sales only reached 1.86 million units worldwide."

Nintendo Wii U Console

Going forward, Nintendo hopes to capitalize on the strong 3DS sales in Japan. In other markets where 3DS sales have been relatively lackluster, Nintendo will look to its upcoming large screen 3DS XL to pick up the slack.

"Furthermore, Nintendo will release the Wii U system, the successor of Wii, mainly in Japan, the United States, and Europe at the end of this calendar year, and propose a new play style of home entertainment with its unique controller embedding a 6.2-inch touchscreen," Nintendo said.