Nintendo profit falls 66%
Falling demand, stronger yen impact salesTOKYO -- Nintendo Co. Ltd. reported a 66% fall in quarterly operating profit on slowing demand for its Wii video game console and a stronger yen, and stuck to its full-year forecast for a decline of 12%.
Nintendo has weathered the economic downturn relatively well thanks to the popularity of the Wii and its DS handheld player, which have catapulted it to the top of the global game market ahead of Sony Corp. and Microsoft Corp.
But Nintendo expects its profit to fall for the first time in four years in the current year to March 2010 as the Wii's momentum slows and the company faces increased competition in the handheld business from Apple Inc.'s iPhone.
It has also been hurt by a stronger yen, which eats into earnings generated overseas.
The company said Thursday its operating profit came to ¥40.4 billion ($426 million) in April-June, against a ¥119.2 billion profit in the same quarter a year earlier and a consensus estimate of ¥74.5 billion from the average forecast of three analysts polled by Thomson Reuters.
Nintendo reiterated its forecast for operating profit to fall to ¥490 billion in the full year to next March, against the market consensus for ¥514 billion.
Nintendo reiterated its full-year forecast for Wii console sales of 26 million and the DS of 30 million.
Analysts expect demand for the Wii to get a boost later in the year with Nintendo scheduled to launch major titles for the holiday shopping season.
Nintendo shares closed up 2.6% at ¥26,810 ahead of the earnings announcement, compared with a 0.5% gain in the benchmark Nikkei average .N225
Shares of Nintendo are down 21% since the start of the year, underperforming the benchmark Nikkei's rise of about 15%.