Nintendo has just posted some negative figures concerning its operating income. The company has reported an operating loss of $132 million due to sharp drop in Wii sales. It seems the gaming console giant is experiencing the Osborne effect as it announced the launch of a next-generation console, resulting in dropped sales of its existing gaming console. Ninendo announced its plans of launching the next generation Wii U gaming console with the hope that this will prove beneficial, but it did just the reverse. Gamers, in anticipation of Wii U console, stopped purchasing the existing Wii console, which resulted in such big operating loss to the company.

While the total sales last year were of 93.9 billion, this year reported 84.8 billion. Wii sales were 710,000 in this quarter, down from 1.56 million units a year earlier. On the good side, the handheld 3DS sold 1.86 million units, an increase from 710,000 a year earlier. As 3DS is a segment where the company is making profits, Nintendo revealed its plans to focus more on digital downloads to improve sales of the 3DS and release a larger 3DS XL handheld at the end of this month.

In the past one year, Nintendo has been suffering from numerous setbacks in the financial area. The company posted a 29 percent decline in the sales revenue on March 31, 2011. The company announced that its net profit from the fiscal year that ended on March 31st fell 66 percent to $947 million and released sales revenue figures of $12.31 billion representing a 29 percent decline. Later in the year, Nintendo had some positive 3DS sales, and managed to ship a sizable number of its 3DS three-dimensional mobile gaming consoles despite disappointing results throughout the past few quarters. In August 2011, the company sold 214,821 3DS units in Japan and a total of 4.3 million 3DS’s worldwide by the end of July 2011.

We strongly anticipate Wii-U to change the landscape, but for that Nintendo needs to bring something really innovative, especially when there are strong market competitors like Microsoft and Sony. They need to make a huge comeback after disappointing sales for the DS3 and the 2006 Wii console. They need to prove that they’re still in the game. Besides Wii U console, another offering will be the new game controller called the Wii U GamePad. For hardcore gamers, Nintendo also offers Wii U Pro Controller, which means amazing game controls. As of now, the gamers are eagerly waiting for Wii U console and have somehow ditched the current generation Wii. Let’s see how Nintendo’s next generation console flips the scenario.