Nintendo reported a 2.01 billion yen (US$24.6 million) net loss for the six months to Sept. 30, as its sales of hardware and software dropped, the company said on Thursday. It sold 42 percent fewer handheld game consoles than a year earlier.

The loss compares to a profit of 69.5 billion yen during the same period last year. Sales of 363.16 billion yen were down about 34 percent compared to a year earlier.

The main reasons for the swing from profit to loss is flagging sales -- of Nintendo's Wii console, of its DS family of handheld consoles, and of related software. Results were also affected by a stronger yen, the company said.

Nintendo sold 6.69 million DS-family consoles during the six-month period, including 2.26 million DSi consoles and 3.21 million DSi XL consoles. In the same period a year earlier, before the launch of the DSi XL, it sold 11.7 million DS-family consoles.

Sales of the Wii dropped less, from 5.75 million units to 4.97 million.

The product that may help the company turn around its fortunes is the portable 3DS, which will allow players to see games in 3D without the use of special glasses. However, the product won't go on sale until next year, missing the important end-of-year holiday shopping season.

Also, the 3DS will enter a market that is very different from when the original DS launched in 2004: More of Nintendo's target market are playing games on smartphones. Reports have also recently surfaced that Sony Ericsson is working on a PlayStation-branded smartphone based on the Android operating system, which would further intensify the competition from smartphones for gamers' attention.

To be able to compete, Nintendo's stand-alone portable consoles will likely have to add more features besides gaming, though they don't necessarily have to become full-fledged smartphones, according to Richard Webb, directing analyst at market research company Infonetics. He thinks that the PlayStation smartphone will become a reality, but that its success -- and that of Nintendo's 3DS -- will be determined by the availability of good games.

http://news.yahoo.com/s/pcworld/20101028/tc_pcworld/nintendolosesgriponhandheldgamingdropsintoloss

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While the article itself is fine, the topic for the article is pure gold. By reading only the topic, one would think Nintendo is doing really bad in handheld market. While inreality, they are doing fine comparing to competition and have the same "grip" on the market.

Nintendo is domed. I blame Pachter.

While they may not be the best selling they have by far the best quality 3rd party support to go along with selling a quarter of a million DS units every week.

So I don't think Nintendo mind.

3DS will save all!

But I am still astounded at the DS....wow @ the DS!

Hey Carl who is that girl in your post.

One issue they have is that you get companies selling what would otherwise be games costing $25-30 on cartridges for $1-15 on direct download on other platforms, especially Apples iOS platforms. Its this competition for the low end customers which is more problematic and that explains their move towards the core gamer with the 3DS.

I think the key part in the article is that Nintendo lost money during the last 6 months, for the first time in 7 years....

With the economy how its going I would have to say they are doing pretty damn good. I think that this holiday is going to be a great one for them.

Wait, Nintendo actually has a time in the red now? O_o

Q2 2009: ¥27,176m profit

(Q1 2010: ¥25,216m loss)

Q2 2010: ¥23,205m profit

They are doing just fine financially. They made pretty big loss during Q1 because they put all exchange losses of 2010 fiscal yeat at Q1. Otherwise it would have been also profitable quarter.