Nintendo reported an operating loss of 10.3 billion yen, or $132 million, during its first fiscal quarter, which ended June 30. Wii sales have dropped significantly, and gamers are now awaiting the launch of the Japanese company’s Wii U game console, which is expected to arrive later this year. The results show the peril of long transitions from one product generation to the next.
Rivals Microsoft and Sony have been gaining share for a while. The company is experiencing the Osborne effect (self-defeating prophecy), in which sales of its current generation console are dropping because it has announced its next-generation machine. Nintendo reported Wii sales of 710,000 in the quarter, down from 1.56 million units a year earlier.