Nintendo posted a sharp drop in quarterly profit and forecast a bigger-than-expected full-year loss, its first at an operating level, as it battles a strong yen and its games devices lose ground to gadgets such as Apple's iPhone. 

The creator of the Super Mario franchise dominated the video games industry for years with its DS handheld players and Wii home consoles, but is now struggling to keep up as more versatile smartphone and tablet sales boom. 

Nintendo now expects an annual operating loss of JPY45 billion (USD575 million), dwarfing expectations of a JPY4.2b loss, based on the average of 21 analyst forecasts.