Nintendo said Wednesday tepid sales of its Wii U console dented its bottom line, although it swung back to profitability in the six months to September thanks to a sharply weaker yen.
Customers try to play Nintendo's portable videogame console at a Tokyo electronics shop on October 30, 2013
The firm said net profit for the half-year period came in at 600 million yen ($6 million), reversing a 28 billion yen loss a year earlier, but it still logged an operating loss of 23.3 billion yen.
Sales fell 2.2 percent to 196.6 billion yen.
Kyoto-based Nintendo blamed its weak earnings partly on high development and marketing costs for the Wii U, although sales of its 3DS handheld console and related game titles fared better.
The company had cut prices for both products to shore up flagging sales.
"The Wii U hardware still has a negative impact on Nintendo’s profits, owing mainly to its markdown in the United States and Europe," it said in a statement.
Nintendo launched the Wii U late last year with high hopes it would repeat the original Wii console's blockbuster success.
But analysts said a lack of games took away some of the fizz the company had been hoping for after the 3DS had initially suffered from disappointing demand abroad.
"Wii U is not as good as we had originally expected," said Shun Tanaka, game analyst with SMBC Friend Securities Center.
"But the company's crucial period is the Christmas selling season, which will determine how its annual performance turns out. So their real fight still lies ahead," he added.
Fierce industry competition will escalate this season as Sony releases its PlayStation 4 and Microsoft rolls out its Xbox One.
Nintendo, maker of the Donkey Kong and Super Mario brands, has been locked in war with its rival for dominance of a sector worth about $44 billion a year.
At the same time the trio face tough economic conditions in their key US and European markets, while also fending off a challenge from cheap -- or sometimes free -- downloadable games for smartphones and tablets.
Nintendo had hoped the Wii U would help breathe new life into its performance after its 3DS console saw disappointing demand overseas.
The system was the world's first video game console with a 3D screen that works without special glasses.
As the holiday shopping season approaches, Nintendo has revved up its offensive with successive releases of possible smash-hit titles, including "Super Mario 3D World," "Wii Party U," and "Wii Fit U".
Despite weak demand for the Wii U, Nintendo kept its sales forecast for the console at 9 million units for the year to March 2014.
Nintendo also stressed that a new Pokemon game title globally released in October for the 3DS has seen strong initial sales, "further propelling the popularity of the system".
And it is counting on strong demand for its less-expensive Nintendo 2DS handheld console.
Nintendo maintained its annual forecasts, expecting a net profit of 55 billion yen and an operating profit of 100 billion yen on sales of 920 billion yen.
The company's Tokyo-listed shares fell 1.49 percent to 11,220 yen, with its results published after markets closed.