Nintendo reports annual profit down 18 percent on Wii price cut, sliding sales

Thursday, May 6, 2010

Nintendo’s annual profit down 18 percent

TOKYO — Japanese game-maker Nintendo suffered its first drop in annual profit in six years, hit by a price cut for the Wii home console and sliding global sales.

The maker of Super Mario and Pokemon games said Thursday its net profit for the fiscal year ended March 31 fell 18 percent to 228.6 billion yen ($2.5 billion).

Kyoto-based Nintendo Co., which does not break down quarterly numbers, said annual sales slipped 22 percent to 1.434 trillion yen ($15.4 billion).

Nintendo is expecting tough times to continue. It forecasts sales to fall 2.4 percent to 1.4 trillion yen ($15 billion) for the fiscal year through March 2011 and expects earnings to slide 12.5 percent to 200 billion yen ($2.2 billion).

But Nintendo expressed confidence in the popularity of its game machines. It is banking on a handheld that allows for 3-D games without the need for special glasses. It is set to go on sale during the fiscal year through March 2011.

Sales of its DS portable series, including the DSi XL with larger screens, which went on sale overseas in March, totaled 12.3 million in the Americas — breaking the game-machine sales record for the region, it said.

Worldwide, DS sales reached 27.1 million during the fiscal year, making for a cumulative 128.9 million sold, allowing it to surpass Nintendo’s Game Boy series, released in 1989, and up to now the top-selling handheld machine.

Nintendo acknowledged Wii home console sales struggled in the first part of the fiscal year, when consumer spending was weakened by the global financial crisis, but recovered for the key year-end shopping season.

For the year, Wii sales totaled 20.5 million for cumulative sales reaching 70.9 million — the largest ever for game consoles for Nintendo.

The game maker said that a strong yen also eroded its performance for the fiscal year ended March 2010.

Nintendo is expecting to sell 30 million DS machines and 18 million Wii’s in the current fiscal year.

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