Is it game over for Nintendo?


The once dominant Nintendo has taken a backseat in the gaming world, falling behind rivals like Sony and Microsoft - but the company is hoping that new launches will help it get back in the game.

Nintendo, known for its Super Mario franchise, reported an operating loss of 46.4 billion yen ($457 million) and a net deficit of 23.2 billion yen on Wednesday. It followed weak sales the Wii U console, an upgraded version of the popular Wii.

The Nintendo Wii U
Source: Nintendo | Facebook

But the Japanese technology company plans to make a comeback in the $93 billion video games market by launching a host of new games—including "Mario Kart 8" and a beat-'em-up called "Super Smash Bros." Nintendo says that, as a result, it will post an operating profit of 40 billion yen this financial year.

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The Wii U has been a major underperformer for Nintendo since its release in December 2012, in stark contrast with its predecessor which appealed to casual gamers across the world.

But while Nintendo is hoping the new releases will drive Wii U sales, analysts are not convinced this will solve the company's problems.

"There is a clear lack of strong launch titles based on popular Nintendo franchises that has harmed the uptake of the (Wii U) console," Sam Gee, senior technology and media analyst at Mintel, told CNBC in a phone interview.

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"They have got some games coming out which should prompt people towards Nintendo, but it's not going to get the same uptake the Wii had."

Mobile gaming

Since the PlayStation 4's release in November 2013, Sony has led the console battle, selling over 7 million units. Whereas Microsoft has sold 5 million of its Xbox consoles to retailers over the same period, according to market researchers NPD, although the actual number bought by customers is lower.

Nintendo won't quit hardware: Pro

By contrast, Nintendo is trailing behind its competitors, having sold only 2.72 million units of its Wii U in the past 12 months and 6.17 million since its release—despite going on sale almost a year earlier than Sony and Microsoft's offerings.

The explosion of mobile gaming has also hit Nintendo, analysts said, as it failed to cash in on its popular franchises. Global revenue from mobile gaming is expected to $22 billion by 2015, according to technology research firm Gartner.

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"These days gaming is much more of an everyman's past-time thanks to mobile devices. Nintendo has struggled to find its USP (unique selling point) in an industry now overflowing with the cute, fun, casual games that made Nintendo so popular among all ages," Heloise Thomson, gaming analyst at Enders Analysis, told CNBC in a phone interview.

"It's hard to justify buying a Wii U for your child when they already have your second-hand tablet to play with, and a library of games that only cost £2 ($3.40)."