Nintendo's latest financial figures don't make for pleasant reading at all – but the company has a plan to reverse the situation, and it involves producing budget gaming hardware for developing markets.
In its Q4 figures, Nintendo made a greater loss than expected (by analysts, or indeed its own forecasts), running into the red to the tune of 33.4 billion yen (£193 million), compared to its own prediction (recently revised downwards) of a loss of 25 billion yen (£145 million).
Poor Wii U sales drove coffers downwards – and more to the point, poor game sales off the back of that. Nintendo expected to shift 2.8 million units of the Wii U (again, revised massively downwards from 9 million previously), but didn't actually make this target, stalling at just over 2.7 million units.
The plan for recovery, then? Rather than push down the price of the Wii U further still, Bloomberg reports that President Satoru Iwata has said Nintendo will develop new consoles targeted at emerging territories.
This is, of course, a big change in strategy for Nintendo, but the company needs to do something radical. We've previously discussed the possibility of Nintendo producing games for phones as another alternative, but Iwata mentioned this and noted that he didn't see this as a sustainable path for revenue going forward.
Instead, the company is eyeing markets like China with cheap consoles, a country that recently lifted its game console ban, with Microsoft deciding to take the plunge there already with the Xbox One.
Iwata said: "We want to make new things, with new thinking rather than a cheaper version of what we currently have. The product and price balance must be made from scratch."
We still don't see why Nintendo can't pursue this strategy while dipping a toe in smartphone gaming as well, at least to produce some profits on the side, and test the waters.