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Nintendo Profits Nosedive

| 27 Jan 2011 16:14
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Nintendo has cut its Wii and DS sales forecasts in the wake of major slumps in revenue and profit, making a successful launch of the new 3DS handheld even more vital to the company's fortunes.

After years of dominating the console market, it looks like Nintendo might finally be feeling the squeeze. Net income for the nine month period ending December 31 dropped 74 percent year-over-year to ¥49.6 billion ($597 milllion). Revenues over the same period slipped 32 percent to ¥808 billion ($9.7 billion) while operating profit was down 47 percent to ¥158.8 billion ($1.9 billion). Nintendo cut its sales forecast for the Wii by 8.6 percent and the DS by 4.3 percent, and is now predicting its lowest annual profit in six years.

"The results today are much worse than expected, casting doubts on the company's full-year outlook," said Tokai Tokyo Securities analyst Yusuke Tsunoda. "This puts even more pressure on Nintendo to make the 3DS debut a success."

Nintendo managed to put out 13.7 million Wii systems over the nine month span, down 20 percent from the previous year, and 15.7 million DS handhelds, a drop of 33 percent. The company also reaffirmed its plan to ship four million 3DS systems in the first month of launch to avoid the shortages that plagued the early years of the Wii.

Source: Bloomberg

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