You seem like you know a decent amount about financials, so I was just wondering how well Nintendo can handle losses like that.  I know it has lots of cash reserves, but any insight would be cool.

R&D and the raising yen, sales on their aging hardware are being slowed naturally, 3ds hasn't seen its holiday season yet. (the first two are the real culprits)

Explained.

or more simply
(Cost of R&D + losses from rising yen) > (Earnings of aging products on the market + Earnings from a product that hasn't taken off yet.)

No need for haste here. They will lose another 10-20% after lackluster Wii U sales next year :D

http://www.reuters.com/article/2011/10/26/nintendo-loss-idUSL3E7LQ0HP20111026

its just H1 loss...they expect a profit at years end

* Nintendo to report July-Sept earnings on Thursday

* Forex losses of 40 bln yen expected -Nikkei

* First half net loss also likely larger than forecast -Nikkei

* Company projects full-year operating profit of 35 bln yen

:/ they arent losing a profit, just not getting as much as they thought.

It's nothing going forward if they can get themselves out of this rutt (which to be entirely fair isn't solely down to them)

However this time it's going to take more than to just plod along making small profits like the Gamecube days, I imagin GBA was keeping them in good profits then (as it sold a lot lot better than Gamecube) but if Nintendo's handheld isn't picking up the slack, then WiiU needs to be killer.

They also have the Yen situation which they didn't have back then.

I think (and would be happily proven wrong) the difference between it being ok for Sony to lose billions and not Nintendo is not only is Sony not a gaming only company, but there has always seemed to be some sort of light at the end of the tunnel for them, not just talking about profits and revenues and all that jazz, but the overall business, I guess having lots of products can do that though, they're still not in the best of shapes. But with Nintendo they only have their consoles to fall back on, and with the 3ds (arguably) doing .. not very well right now (I disagree to a point) and with WiiU not going to take off like the Wii (although it might still great) this is why Nintendo's future looks bleak.

The skinny of it imo, Nintendo can't afford to sit in cruise control like they did the gamecube era and make moderatly decent profits, not only will most of that be wiped away by the strong yen situation but who wants to invest in a company going nowhere?

What are Nintendo's cash funds? I keep hearing $10B being floated about, if they've lost 1.3B in the last 6 months, it kinda puts that figure into perspective.

I'm sure Nintendo will sail through fine though, but people barking at people for thinking they're lunatics for thinking Nintendo isn't in a bad shape Vs prior years, need to shut up.

anyone have a history of nintendos past financial results to put this into perspective?

im guessing nintendo always have a low like this in between generations but this seems very bleak.

waiting for thier reports before making any conclusion... This holiday though is going to bring numbers to green...

There have been a couple of threads about this on VGChartz previously. The only one I could find now was one of Seece's previous ones, and it's not the best fit here (the thread itself is lovely, it just doesn't fit this situation too well, as it's also a bit too short-term to make a good conclusion regarding Nintendo's past).

http://gamrconnect.vgchartz.com/thread.php?id=123850

If what Nikkei says is true, Nintendo is facing a loss larger than what Sony posted in FY08 or Microsoft in FY06, although nowhere near as large as what either of the other two posted in FY07.

As Seece sort of pointed out earlier, a loss of 1.3 billion dollars isn't anywhere bankrupting Nintendo. If they can get the 3DS and Wii U to be even half the success the Wii + DS was, they'll easily cover those losses.

The problem for Nintendo is that they can't ever afford getting a failure anywhere near the scale of the Ps3, which is likely to have gone well over 5 billion dollars in the red. If they can't turn the 3DS around, they might be looking at a mini-Ps3 there, which will just continue to bleed their pockets for a while to come, instead of being what keeps them profitable (like their previous handhelds did).

Even if they can't turn things around, it's unlikely for Nintendo to go bankrupt. Ending up with taking a more passive and less innovative road (like with the GC and GBA) isn't impossible at all, though.

Last minute notice: Upon further inspection, that thread does have  numbers for Nintendo dating back to 1981. Here's the link to it: http://img9.imageshack.us/img9/9581/profityen.jpg . It's in yen, but you can see that Nintendo's profits have already been relatively stable. A dive at the end of generation isn't something that has really happened to them before.