Nintendo has reported a £143 million loss for the three-month period across April and June, but the battling platform holder says it is encouraged by sales of its 3DS handheld.
Revenue for the period climbed to £700 million, yet cost of sales and operating expenses pulled Nintendo into the red for the third consecutive quarter. This is likely due to the expenses involved manufacturing the 3DS.
"The profitability of the Nintendo 3DS hardware is improving, but the hardware has been in negative margin," the company's said.
Nintendo pointed out that such losses were an improvement on its performance in the same period last year. It also revealed that the 3DS will not be selling at a loss going forward.
It said 3DS hardware sales were improving, with the system shifting 19 million units into retail worldwide. 3DS software sales stand at about 53 million.
Nintendo expects to sell 18.5 million 3DS consoles for the financial year ending March 2013, as well as return to profit.