Business / Technology

OSAKA, Japan — Nintendo more than tripled its full-year loss forecast Thursday as the success of Apple devices erodes demand for the company's 3DS handheld player. Its shares fell as much as 7.8 percent in trading after the company's announcement.

The net loss in the year ending in March may be $838 million, compared with an earlier forecast for a loss of $258 million, the world's largest maker of videogame machines said in a statement. Thursday's figure was more than the average loss of $374 million forecast by 18 analysts tracked by Bloomberg.

President Satoru Iwata, who cut 3DS prices by as much as 40 percent last year, said he expects full-year sales of 14 million units for the device that shows images in 3-D, down from an earlier forecast of 16 million.

The Kyoto-based company, whose U.S. headquarters is in Redmond, is predicting its first annual loss in at least three decades because of a surging yen and a consumer preference for gaming on the iPhone and iPad that helped Apple more than double profit in the quarter.

"The company faces a structural problem that people are opting for their smartphones and tablet PCs to kill their time," said Mitsushige Akino, who oversees about $600 million at Ichiyoshi Investment Management in Tokyo. "I can't see Nintendo's next strategy. There will probably be a discussion about how much worse it can get."

Nintendo fell 0.9 percent to $138.50 at the close of trading in Osaka, before the earnings release. In early Friday trading, shares dropped as much as 7.8 percent to $127.71, the lowest level on an intraday basis since February 2004. The stock dropped 56 percent last year, erasing about $24 billion in market value.

"It took time for us to revive sales momentum" after the 3DS price cuts because the company was "a little bit late" in introducing titles featuring the Mario character, Iwata told reporters in Osaka.

Operating loss in the year ending in March may be $580 million, compared with an earlier estimate for a profit of $12.9 million, according to the statement. Nintendo today also reported a nine-month net loss of $624 million, compared with a profit of $639.3 million a year earlier.

Nintendo had a foreign-exchange loss of $692 million in the nine-month period. Nintendo based its annual forecast on the exchange rate of 98 yen to the euro, compared with an earlier forecast of 106 yen. The company kept its rate of 77 yen to the dollar.

"Nintendo's profitability may get lower in the long term because people are starting to stay away from videogame consoles," Tomoaki Kawasaki, a senior analyst at Cosmo Securities in Tokyo with a "neutral" rating on the stock, said before the earnings release. "The yen's gain is a burden for Nintendo as it hasn't taken sufficient measures to deal with the impact of the strong currency."

Nintendo generates about 80 percent of revenue outside Japan, and a stronger yen reduces the repatriated value of overseas assets. The yen has gained 5.6 percent against the dollar and 10 percent versus the euro in the past 12 months, the best performer among 11 Asian currencies tracked by Bloomberg.

The console maker hasn't reported a full-year net loss since 1981, when it began releasing consolidated earnings, according to its website.