Nintendo profit tumbles 61 percent in April-June on fewer hit gaming titles, stronger yenBy Tomoko A. Hosaka, AP
Thursday, July 30, 2009
Nintendo profit tumbles as gaming hits dwindle
TOKYO — Nintendo’s quarterly profit tumbled 61 percent, hurt by a stronger yen and fewer blockbuster games for its popular Wii gaming console and DS handheld device.
The Kyoto-based company said Thursday its April-June net profit fell to 42.3 billion yen ($445.2 million) from 107.3 billion yen a year earlier.
Sales declined 40 percent to 253.5 billion yen, while operating profit — a measure of its core business — fell 66 percent to 40.4 billion yen.
The company blamed its results on a sparsity of hit software titles. Last year, new game titles like “Mario Kart Wii” and “Wii Fit” helped drive sales of consoles worldwide, it said.
Nintendo sold 2.23 million Wii units during the three months, compared with 5.17 million last year. Global sales of Wii software totaled 31.07 million units from 40.41 million the previous year.
The company was also hurt by a stronger-than-expected yen, which reduces the value of overseas profits when repatriated to Japan.
It has estimated an exchange rate of 100 yen to the dollar. Instead, the dollar averaged 97.32 yen during the quarter.
President Satoru Iwata has described Nintendo as “recession-proof” and did not cite the global economic downturn as a factor in its performance.
Still, the maker of Pokemon and Super Mario games is hardly immune to slumping consumer demand, which is hitting the entire gaming industry.
In June, U.S. sales of game hardware, software and accessories plunged 31 percent from the same month last year to $1.17 billion, according to market researcher NPD Group. It was the largest year-over-year decline the industry has seen in nearly nine years.
Nintendo’s sales to the Americas fell 38 percent, while those to Europe plunged by more than half.
The company is saving what it hopes will be its biggest hits for the latter half of the year. It has high hopes for the recently launched “Wii Sports Resort,” which so far has gotten good reviews. It also plans to release “New Super Mario Bros. Wii” and “Wii Fit Plus” later this year.
It left unchanged its forecasts for the full year through March 2010. It continues to expects net profit of 300 billion yen on 1.8 trillion yen in sales.
In trading Thursday, shares of Nintendo jumped 2.6 percent to 26,820 yen, compared with a 0.5 percent gain in the benchmark Nikkei 225 index.
Nintendo reports earnings based on Japanese accounting standards.
Tags: Asia, East Asia, Entertainment And Media Technology, Games, Japan, Recreation And Leisure, Tokyo