Money Matters - Simplified

Nintendo reports fall in full year net profit

Nintendo is hoping to sell approximately 18 million units of the Wii game console in this fiscal year. The estimation is lower than 20.53 million units targeted a year earlier.

Hammered by weak sales of its game consoles, Nintendo Co Ltd., the Japan-based video game giant, has reported fall in the full year net profit.

The Kyoto-based company posted an 18 percent decline in net profit to 228.64 billion yen or $2.44 billion yen for the fiscal year ended March 31, compared to 279.09 billion yen reported in the same period a year earlier.

The figure is also below the net income expectation of 230 billion yen by Nintendo.

The decline in profits, its first drop in the last six years, was anticipated by the analysts, considering the weak video game market last year.

Analyzing the fiscal year
The maker of super hit games like Super Mario and Pokemon said that it witnessed a plunge in sales in the last fiscal year.

The sales for the video game behemoth plummeted 22 percent to 1.434 trillion yen or $15.4 billion.

So far, Nintendo’s Wii is the best selling game console in the market, beating rivals like Xbox 360 from Microsoft Corp, and PlayStation 3 from Sony Corp.

The sales of DS portable series, which was launched in overseas markets in March, registered sales totaling to 12.3 million in the Americas alone.

Net income for the company is expected to slide 13 percent to 200 billion yen for the financial year ending March 2011.

Revenue for the company reduced 22 percent to 1.434 trillion yen. Further, operating profit slid 36 percent to 356.57 billion yen.

Anticipating tough times ahead
The hard times for the Japanese video game company do not end here. Taking into consideration the fact that the world markets are still fragile, Nintendo is expecting a further plunge in revenue.

Net income for the company is expected to slide 13 percent to 200 billion yen for the financial year ending March 2011.

Operating profits will probably plunge 10 percent to 320 billion yen due to fall in revenue.

Nintendo is hoping to sell approximately 18 million units of the Wii game console in this fiscal year. The estimation is lower than 20.53 million units targeted a year earlier.

But the company is targeting to sell 30 million DS units, 11 percent more compared to 27.11 million units in the previous year.

Apart from the hardware sales, company is also expecting its software for the Wii to decline 14 percent to 165 million units. For DS, it could drop 1 percent to 150 million.