Nintendo may be back in the spotlight thanks to its association with the smash hit Pokémon Go, but that also means it’s back under pressure to perform.

And if its latest earnings report is anything to go by, the fundamental problems Nintendo has faced for years remain. Its hardware sales – particularly for consoles – are weaker than its main competitors. As a publisher, it hasn’t offered many big, breakthrough hits this year; the next major title for the company, “The Legend of Zelda: Breath of the Wild,” won’t come out until 2017.

Nintendo’s net sales are down 31 percent from the same period last year, to around $587 million. That puts the firm at an operating loss of about $48 million for the quarter. Nintendo reported sliding sales for its console, selling just 220,000 Wii U units. That brings the Wii U sales up to 13 million in total, as compared with an estimated 42.5 million units for Sony’s top-selling PlayStation 4.

Software sales were up 7 percent for the 3DS and 3 percent for the Wii U.

Stepping back, many investors remain concerned that mobile games continue to threaten Nintendo’s handheld business, which saw its sales fall 7 percent from the same time last year. The company also delayed the release of the Pokémon Go Plus, a wearable device that’s supposed to complement the app by letting users play without always looking at their smartphone screens.

The accessory was originally supposed to come out in late July – but that was before the Pokémon Go fad exploded. Nintendo said it is now slated for September.

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That’s a lot of doom and gloom. But there are bright spots. Pokémon Go itself is not the path to Nintendo’s redemption. The company only owns part of that franchise and doesn’t see much of the money. But the reflected glow of success coming from the app shows that there’s a path to profitability for Nintendo. While it doesn’t make much money from Pokémon Go itself, the wildly successful app shows that Nintendo commands a brand loyalty and nostalgic power that can still be tapped in novel ways.

Many have suggested that the company tap into that deep affection through licensing agreements with mobile game makers. But Nintendo doesn’t seem to want to be just a publisher and head down the path of its once arch-rival Sega, which eventually stopped making hardware.

For example, the company is continuing with plans for the NX, another new console that – according to apparent leaks – will try to bridge the gap between portable and console. According to a report from Eurogamer, the console will have detachable controllers and a main screen that can dock into your television when you want to play on the big screen.

The games may also run on cartridges or cards rather than discs, which could be read as a throwback to old-school consoles. That makes sense given that Nintendo’s current portable games are on game cards.

Still, Nintendo will face the challenge of persuading players to buy a separate device devoted to playing games, rather than simply killing time with apps on their smartphones. It may not be the kind of push into mobile that investors have been clamoring for Nintendo to take.

Shares for the company closed down 5 percent at the end of trading.


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