Nintendo deliberately sacrificed any chance of turning a profit this year in order to build momentum behind the 3DS, CEO Satoru Iwata has revealed.
However, he expects the cash to start rolling in again come 2012.
In an investor Q&A published on Nintendo's official site, Iwata explained that the recent 3DS price cut was vital in ensuring the system's long-term success.
"As far as the current term, ending in March 2012, is concerned, we have decided that driving the sales of Nintendo 3DS hardware is our main priority, and in a sense, we can say that by doing this, we have sacrificed our profitability for this fiscal year," he said.
"We came to the conclusion that we needed to make that bold investment, instead of focusing just on this term's profitability, so that we would be able to make the Nintendo 3DS an important foundation for Nintendo for years to come."
Iwata added that the company shouldn't have to make such an unprecedented loss-leading moving again in the near future.
"During the fiscal year ending March 2013, we are expecting the profitability of Nintendo 3DS hardware to improve significantly. In other words, we are not anticipating a situation where we must expand the hardware by generating a large loss on the sales of the hardware.
"As long as we can create sufficient momentum, I think we will be able to come close to our usual course of business operations in the next fiscal year."
As revealed last week, Nintendo reported losses of around £580 million for the last six months and expects to post a £165 million loss for the fiscal year as a whole.