FILE: Nintendo posts sharp drop in quarterly profit and forecasts a bigger-than-expected full-year loss, its first at an operating level, as it battles a strong yen

Record ID: 451826

  • Title: FILE: Nintendo posts sharp drop in quarterly profit and forecasts a bigger-than-expected full-year loss, its first at an operating level, as it battles a strong yen
  • Date: 27th January 2012
  • Summary: TOKYO, JAPAN (FILE - SEPTEMBER 2011) (REUTERS) TESTING AREA FOR NINTENDO 3DS AND WII CONSOLES PEOPLE PLAYING WITH 3DS HANDHELD CONSOLES NINTENDO STAFF WALKING OUT AND GRABBING 3DS STAFF PLAYING MARIO KART 7 ON 3DS STAFF PLAYING MARIO KART 7 VARIOUS OF PEOPLE PLAYING 3DS VARIOUS OF PEOPLE USING 3DS VARIOUS OF PEOPLE PLAYING WII VERSION OF LEGEND OF ZELDA
  • Embargoed: 11th February 2012 12:00
  • Keywords:
  • Location: Japan
  • Country: Japan
  • Topics: Business,Arts / Culture / Entertainment / Showbiz
  • Reuters ID: LVA4ZVHDW3Z0X7GWTRDX0DMK8Z24
  • Story Text: Nintendo Co Ltd posted a sharp drop in quarterly profit on Thursday(January 26) and forecast a bigger-than-expected full-year loss, its first at an operating level, as it battles a strong yen and its games devices lose ground to gadgets such as Apple's iPhone.
    The creator of the Super Mario franchise dominated the video games industry for years with its DS handheld players and Wii home consoles, but is now struggling to keep up as more versatile smartphone and tablet sales boom.
    Nintendo now expects an annual operating loss of 45 billion yen (575 million U.S. dollars), dwarfing expectations of a 4.2 billion yen loss, based on the average of 21 analyst forecasts.
    Nintendo cut its forecast for annual sales of its ageing Wii console to 10 million devices from 12 million, and for the 3DS handheld games device to 14 million from 16 million.
    Poor sales forced Nintendo to slash the price of its much-anticipated 3DS handheld games device in August, just six months after its launch.
    The move halted its record of making profits on games hardware as well as software, a business model that took operating income to a high of 555 billion yen in 2008/09.
    Nintendo also faces tougher competition in the home console market from Sony Corp's Move and Microsoft Corp's Kinect, with consumers more eager than ever to seek out bargains in the harsh economic environment.
    The company plans to launch the Wii's successor, the Wii U, in Japan, the United States, Europe and Australia in the year-end season.
    The results came a day after Apple blew away Wall Street's expectations with its own quarterly earnings.
    Shares in Nintendo have halved to below 11,000 yen since the beginning of the financial year in April, hit by weak 3DS sales and market disappointment with the Wii U next-generation home console, unveiled at the E3 games show in June and set to go on sale late this year.
    At their peak, in late 2007, the shares traded at 73,200 yen.
    Last week, the stock dipped to 10,020 yen, the lowest since April 2004, before either the DS or Wii were launched.
  • Copyright Holder: FILE REUTERS (CAN SELL)
  • Copyright Notice: (c) Copyright Thomson Reuters 2012. Open For Restrictions - http://about.reuters.com/fulllegal.asp
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