Nintendo profits drop by 18.1%

Slower sales send profits down for first time in six years

TOKYO -- Nintendo announced its first drop in annual net profits in six years -- down 18.1% to ¥228.6 billion ($2.4 billion) -- on slower Wii and DS console sales, exacerbated by a strong yen.
 
Despite a strong January to March final quarter, full-year sales dropped to ¥1.43 trillion ($15.07 billion) from 1.84 trillion a year earlier, and Nintendo is forecasting further falls.
 
Following several years of rapid growth and record profits, global sales of the Wii fell 21% to 20.53 million, while sales of the hand-held DS slowed 14.75% to 27.1 million units.
 
With both Sony and Microsoft releasing the kind of motion-controllers that have been central to the Wii’s appeal, much of Nintendo’s hopes will be pinned on its new 3D portable console, the 3DS.
 
A full demonstration is expected at this year’s E3 game show, but Nintendo is believed to have developed a hand-held console that will produce 3D gaming without the need for special glasses.
 
The Kyoto-based company is predicting the new console will boost DS sales back up to 30 million units, and DS software to hold at 150 million titles, for the year to March 2011.
 
However, net profit is predicted to fall again, to ¥200 billion ($2.11 billion), as Wii sales fall to 18 million units this year, and software sales drop 14% to 165 million titles.
 
Nintendo is traditionally very conservative in its forecasts.
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