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Sonic bust

It's a dark time in the video game industry. Sony is still reeling from the PlayStation Network hack, Microsoft is seemingly years away from replacing the Xbox, and Nintendo has just announced terrible financials as a result of poor sales of its new 3DS console. But it's not just those burdened by the need to produce and sell hardware who are struggling. Sega, who gave up on the hardware market years ago to become a software-only games producer, are also losing money.

£17 million in the last three months, to be precise. That's compared to a profit of £55 million in the same quarter last year.

This isn't good. Software manufacturers are supposed to be having a great time, making low-cost, big-numbers games for new platforms like the iPhone. But Sega's recent iOS title Kingdom Conquest has sold 1.3 million copies, not many for a low-cost download title. And the company says that while its console software has sold well in Japan recently, sales have been slow in the US and Europe.

In other news, Nintendo boss Satoru Iwata has announced he's halving his salary in response to the company's poor results. The company announced this week it's cutting the 3DS' price by a third to spur sales. That means it'll make a loss on each console sold, hoping to make the money back from software sales.

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