Nintendo Profit Outlook Lowered in the Wake of Lagging Console Sales
By Karla Robinson
October 25, 2012
October 25, 2012
- As it gears up to release the new Wii U, Japanese gaming company Nintendo has significantly lowered its annual profit forecast in light of a strong yen and lagging console sales.
- Following the Wii’s success of 100 million sales, the successor Wii U will go on sale in the U.S. on November 18. Nintendo expects to sell 5.5 million Wii U devices by March 31.
- “The first hardware offering from Nintendo in six years boasts a tablet-like touch screen controller and a social network, and lets users record TV shows through TiVo and other digital recording services,” Reuters explains.
- “Yet, growing competition from tablet PCs and smartphones that are increasingly eating into the $78 billion gaming market mean the Japanese company, which began making playing cards more than a century ago, may struggle to repeat the hit it had with the Wii.”
- The Wii U’s success will indicate to Nintendo’s competitors — like Microsoft and Sony — whether advanced gaming devices can hold their own against mobile devices.
- Nintendo also cut expectations for sales of its 3DS handheld gaming device, after weak demand forced the company to dramatically lower the price tag. Nintendo has, however, held its 2.5 million estimation for DS sales in the next 12 months.
- “[The company’s] operating loss for the three months to September 30 edged down to 18.8 billion yen from a loss of 19.6 billion yen a year ago, and compared with an average loss forecast of 16 billion yen from four analysts,” Reuters adds. “Since the start of the business year, Nintendo’s shares have fallen 17 percent, compared with an 11 percent drop in Japan’s benchmark Nikkei average.”
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