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Hudson Expects Big Things From Nintendo

| 7 Apr 2008 17:12
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Konami's Hudson Soft has hitched its wagon to Nintendo in a very big way, saying a focus on the Wii console should lead to nearly quadrupled profits in only three years.

Michihiro Ishizuka, the new president at Hudson, told Bloomberg his company is targeting ¥10 billion ($97 million) operating profit by March 2011, which he said would come largely as a result of the company's focus on development for the Wii. Hudson has put out ten titles for the Wii so far, with eight more expected in 2008 alone. Hudson's operating profit for the year ended March 31 was ¥2.7 billion ($26.3 million), a jump of 53 percent driven by stronger-than-expected sales of titles for Nintendo's Wii and DS platforms.

"Two years from now will be the time when game-software developers' profits are expected to grow the most, after the winner and loser for consoles becomes clear," Ishizuka said. "I will ensure earnings jumping in the next three years by promoting licensing of our games and increasing spending on promotions." He added that Hudson intends to pay a dividend for the past fiscal year, the first time the company has done so in five years.

"The game-software industry is one of the sectors that will lead corporate earnings this fiscal year," said Yoshihiro Okumura of Chiba-gin Asset Management in Tokyo. "In particular, companies related to Nintendo have a lot of room for profit growth." Nintendo recently passed Sony's PlayStation 2 and PlayStation 3 sales in Japan, according to Enterbrain figures, and is expected to pass Sony in worldwide console sales at some point during this fiscal year.

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