Nintendo is Now Losing Money Thanks to the iPhone

In announcing their annual financial results for 2011, Nintendo posted a deficit of $458 million on the year. Nintendo sold 13.5 million 3DS portable gaming systems worldwide, but it wasn’t enough for the Japanese consumer electronics and gaming company to avoid posting its first annual operating loss.

And, as noted by iMore, lots of fingers are being pointed at the iPhone as the cause of Nintendo’s difficulties. While the Xbox 360 and PlayStation 3 gaming consoles continue to compete with Nintendo’s game console lineup, the iPhone is becoming the de facto device for casual gaming because of the relatively low price of App Store games, the device’s small form factor, and its ease of use. Several titles on the App Store are absolutely free, too.

Nintendo is actually selling the 3DS portable gaming console at a loss right now, but says that it is only temporary. The Kyoto, Japan-based company is hoping that consumers will spend more money on games to help the company recuperate the lost revenues on the 3DS hardware itself. But, with more consumers flocking to the iPhone or iPod touch for pick-up-and-play gaming, the year ahead is going to be yet another tough one for Nintendo.

Perhaps Nintendo should consider finally entering the mobile market. Bringing Super Mario and other smash hit titles to iOS would be a great start.

[Nintendo via iMore]

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