Nintendo Posts 78.5% Quarterly Decline
Nintendo reported a 78.5 percent decline in quarterly operating profit Thursday. Still, the company kept its forecast for a full-year profit increase of 3.1 percent. Nintendo is enjoying strong sales of its DS portable game machine, launched late last year, but sold 60 percent fewer GameCube consoles compared with a year earlier.
The company was also hurt during the quarter by a lack of new big software titles. Most of its widely anticipated games such as a new “Legend of Zelda” for GameCube and “Pokemon Diamond/Pearl” for DS in Japan are expected to launch in the second half. “This is a seasonally volatile industry and Nintendo’s biggest games will come later in the year. They didn’t change their full-year forecast, so I’m not worried,” said Yuta Sakurai, senior analyst for Nomura Securities.
“The difference in profitability from a year earlier is due to the fact that it hasn’t been long since DS entered markets so costs are still high,” said Yoshihiro Mori, senior managing director at Nintendo, adding that it usually takes about a year to benefit from mass production. Nintendo expects to sell 12.4 million DS game machines in the current year.
Sony, which dominates the game console market, raised its PS2 shipment target for the year to 13 million from 12 million, but that is still a 19.6 percent drop from a year earlier. Nintendo expects GameCube sales to fall 33.8 percent in the current year to 10.2 million units. “It just shows that the market is finished with current-generation models,” an analyst said.