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Nintendo's H1 profit falls 59 pct, cuts forecast

Accident

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Feb 23, 2008
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TOKYO, Oct 29 (Reuters) - Nintendo Co Ltd (7974.OS) reported a 59 percent decline in first-half profit on Thursday, hurt by sluggish demand for its flagship Wii videogame console and the strong yen, and it slashed its full-year forecast.

Nintendo, which faces stiff competition in the videogame market from Sony Corp (6758.T) and Microsoft Corp (MSFT.O), said operating profit was 104.4 billion yen ($1.2 billion) in the April-September half, compared with 252.2 billion yen a year earlier.

Nintendo cut its operating profit forecast for the year to March 2010 by nearly a quarter to 370 billion yen, ending a three-year run during which it booked a record profit on booming demand for its Wii console and DS portable device.

That compares with an average estimate of 442.8 billion yen in a poll of 25 analysts by Thomson Reuters I/B/E/S.

Demand for Nintendo products like the Wii has cooled as rival Sony has bolstered its line-up of console games, and as Apple Inc's (AAPL.O) iPhone has become a popular platform for handheld games.

Nintendo's earnings, like those of other Japanese exporters, have also been blunted by the stronger yen JPY=, which eats into overseas profits. Shares of Nintendo have declined about 28 percent so far this year, compared with a 14 percent rise in the Nikkei 225 .N225 share average. (Reporting by David Dolan)


Code:
GROUP                 2009          2008 
Revenue            Y548.06 bln   Y836.88 bln 
Operating Profit    104.36 bln    252.18 bln 
Pretax Profit       110.61 bln    237.31 bln 
Net Profit           69.49 bln    144.83 bln 
Per share 
  Earnings          543.40       1132.46 
   Results are based on Japanese accounting standards. 
 

 

    Nintendo Co. also released the following forecasts: 
GROUP              Year Ending 
                      Mar 2010 
Revenue              Y1.50 tln 
Operating Profit    370.00 bln 
Pretax Profit       370.00 bln 
Net Profit          230.00 bln 
Per share 
  Earnings         1798.50 
   Results are based on Japanese accounting standards. 
 

 

    Nintendo Co. (7974.TO) 
GROUP           Latest Revision      Previous 
           For Year To Mar 2010          Plan 
Midyear                 N/A        430.00 
Year-end             690.00        840.00 
Annual               960.00       1270.00 
   Results are based on Japanese accounting standards. 
 

 

    Nintendo Co. (7974.TO) 
GROUP                      New Forecast         Prior 
                   For Year To Mar 2010      Forecast 
Revenue                       Y1.50 tln     Y1.80 tln 
Operating Profit             370.00 bln    490.00 bln 
Pretax Profit                370.00 bln    500.00 bln 
Net Profit                   230.00 bln    300.00 bln 
Per share 
  Earnings                  1798.50       2345.86 
   Results are based on Japanese accounting standards.


http://www.nintendo.co.jp/ir/pdf/2009/091029e.pdf
 

Osuwari

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Oct 18, 2007
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serves them right for having such a weak lineup and bad advertising.

hopefully this makes them go back to 2007 levels of output and quality.
 
Jul 31, 2007
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The Wii went from selling 600,000 units a month down to 250,000 units in America. Japan was even worse.

Their profit is still fucking high for such drops around the world.
 
Feb 28, 2009
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It was kind of expected considering the software comparisons, but that's still a huge loss. Good thing they're covered for pretty much every quarter from this point on, at least for the next year.
 

AniHawk

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YAY SALES NUMBERS

Wii: 56.14m
Japan: 8.68m
Americas: 25.99m
Other: 21.48m

DS: 113.48m
Japan: 28.12m
Americas: 39.35m
Other: 46.01m

Wii Software: 429.23m
Japan: 39.32m
Americas: 234.41m
Other: 155.50m

DS Software: 638.07m
Japan: 162.69m
Americas: 237.06m
Other: 238.32m

software to system ratios:

Wii: 7.65
Japan: 4.53
Americas: 9.02
Other: 7.24

DS: 5.62
Japan: 5.79
Americas: 6.02
Other: 5.18

Average title sales

Wii:
Japan: 309 titles | 127,249
Americas: 669 titles | 350,388
Other: 636 titles | 244,497

DS:
Japan: 1,445 titles | 112,259
Americas: 1,129 titles | 209,734
Other: 1,417 titles | 168,186
 
Sep 13, 2007
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I wonder if they were starting to think they could continue to sail by with huge gaps in their software lineup forever. Their original forecast seems to suggest as much, and considering how well the Wii did for so long you can almost forgive them for falling for their own hype. You can draw in a new audience, but when you leave your bread and butter market hanging for months at a time it's ultimately going to be at your own peril. In the game industry complacency is the easiest way to blow a good thing. The Wii's still doing great, but they lost a ton of their momentum by totally FUBAR-ing the second half of last year and refusing to be proactive about a price drop. You can tell NCL is finally starting to hustle, but NOA is still pretty much sitting around with its thumb up its ass.
 

Road

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Jan 21, 2008
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Code:
-----------------------------------------------------------
                  Hardware - Half of Fiscal Year
-----------------------------------------------------------
           Japan       Americas      Others       Total
-----------------------------------------------------------
NDS	 1.73(+31%)   4.89( -7%)   5.08(-29%)   11.17(-15%)
Wii      0.72(-29%)   2.45(-47%)   2.59(-43%)    5.75(-47%)

DSi	 1.51         2.94         2.69          7.15
-----------------------------------------------------------


-----------------------------------------------------------
                 Software - Half of Fiscal Year
-----------------------------------------------------------
           Japan       Americas      Others       Total
-----------------------------------------------------------
NDS     15.74(+14%)  32.12(-12%)  23.29(-33%)   71.15(-16%)
Wii      5.23( -8%)  41.40( -3%)  29.58(-10%)   76.21( -6%)
-----------------------------------------------------------


-------------------------------------
            Hardware LTD
-------------------------------------
	Japan  Americas Others  Total
-------------------------------------
NDS	28.12   39.35   46.01  113.48  
Wii      8.68	25.99	21.48	56.14

DSi	 3.73    3.27    3.17   10.17
-------------------------------------


-------------------------------------
            Software LTD
-------------------------------------
	Japan  Americas Others  Total
-------------------------------------
NDS    162.69  237.06  238.32  638.07
Wii     39.32  234.41  155.50  429.23
-------------------------------------



- Million units;
- DSi included in DS.
Edit: sort of beaten.
 

AniHawk

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Way to skimp on the software sales guys. I did find this line pretty funny though:

In addition, a software title from a third party publisher sold over four million units
 

ymmv

Banned
Mar 17, 2007
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Interesting. The number of new Wii titles almost doubled, but software sales were actually down compared to a year ago. Third party publishers won't be very happy about this.
 

Metal Gear?!

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Nov 27, 2007
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GrotesqueBeauty said:
I wonder if they were starting to think they could continue to sail by with huge gaps in their software lineup forever. Their original forecast seems to suggest as much, and considering how well the Wii did for so long you can almost forgive them for falling for their own hype. You can draw in a new audience, but when you leave your bread and butter market hanging for months at a time it's ultimately going to be at your own peril. In the game industry complacency is the easiest way to blow a good thing. The Wii's still doing great, but they lost a ton of their momentum by totally FUBAR-ing the second half of last year and refusing to be proactive about a price drop. You can tell NCL is finally starting to hustle, but NOA is still pretty much sitting around with its thumb up its ass.
This is a good post, full of informed analysis. Thank you.




DarknessTear said:
Can't live off the casuals forever, Nintendo. Give the core gamers more love.
This is not. Perhaps you would like to elaborate rather than rattle off a "lol core gamer" one liner?
 

ksamedi

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Sep 7, 2006
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ymmv said:
Interesting. The number of new Wii titles almost doubled, but software sales were actually down compared to a year ago. Third party publishers won't be very happy about this.
Well considering how much crap they released over the years they shouldn't be too surprised I guess. Maybe they need to fire some key Wii developer staff and hire new ones to get some better results.
 
lorddarkflare said:
Huzzah, maybe they will be more proactive.

Also, they are probably doing better than Sony/Microsoft
In absolute terms you would be correct, however, Microsoft's EEaD division had its profits double over last year this quarter and it was also the best quarter in the entire history of the division.

From the perspective of a shareholder looking forward, this isn't great news for Nintendo even though they outsold them significantly on an absolute scale.

AniHawk said:
It was Dragon Quest IX.
Right, the DS, that makes a lot more sense.
 

lyre

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Sep 8, 2005
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DarknessTear said:
Can't live off the casuals forever, Nintendo. Give the core gamers more love.
The number of casuals and regulars dwarf your so called 'core' gamer.

Nintendo ain't doing shit and ain't going anywhere.

And besides, a guy like you (the 'core' gamer) wouldn't buy them anyway.:lol
 
Jan 30, 2006
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They make $1.2Bn profit in 6mths even after sales dropped. and its still bad.
Sony and MS games divisions would give up their moms to make that kinda money
 

AniHawk

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So, yes. They are.

SuperMattyFighter2T said:
Great news. This might force Nintendo to make some games. Maybe even good ones. Only game I've bought since launch day are the No More Heroes. Not really sure why I even bought the Wii.
Yeah, it seems like you have extreme tunnel vision if you just bought a Wii for No More Heroes. I mean jesus, that game struggles to be decent, let alone good. You have NyxQuest and Swords and Soldiers on WiiWare, Super Mario Galaxy, Fire Emblem: Radiant Dawn, and Metroid Prime 3 from 2007, several lightgun shooter games, and NMH's better cousin in MadWorld. And then there was Klonoa, which is a $30 game and probably the goriest game you'll find.
 
Jan 30, 2006
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lorddarkflare said:
Huzzah, maybe they will be more proactive.

Also, they are probably doing better than Sony/Microsoft
Cant0na said:
xbox division profits double - http://www.gamespot.com/news/6237794.html?sid=6237794&part=rss&subj=6237794

ps3 slim leads npd - http://www.neogaf.com/forum/showthread.php?t=377425

doesnt really matter anyway, the wii sold more than what the other two will do in their life time

MS Games division $169,000,000 profit
Nintendo..................$1,200,000,000 profit

Overall MS division is still in the red and Nintendo are around $12bn in the black

So yeah, Nintendo are doing MUCH better
 
Jan 30, 2006
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lorddarkflare said:
Holy shit.

That number is too low, somethings wrong there,
Fixed, according to Iwatas thinking.

New Wii next year with the drop off it's experiencing

Delay Mario Galaxy 2 and Zelda to Wii2 or start working now on upgrading them for the launch window of Autumn 2010 AND GOD DAMN EPIC MICKEY
 

Road

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Jan 21, 2008
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Forecast for the FY (units):

-NDS
--Software: 150m (revised down from 180m).
--Hardware: 30m (unchanged).

-Wii
--Software: 180m (revised down from 220m).
--Hardware: 20m (revised down from 26m).
 

Cant0na

Banned
Feb 5, 2009
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lorddarkflare said:
Holy shit.

That number is too high, somethings wrong there,
no its not

that number is just basically 360 vs Nintendo as a whole.

if you take the whole company and not just a single product, Microsoft's overall profit was $3.57 billion even with a 18% decline.
 

AniHawk

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DefectiveReject said:
Fixed, according to Iwatas thinking.

New Wii next year with the drop off it's experiencing

Delay Mario Galaxy 2 and Zelda to Wii2 or start working now on upgrading them for the launch window of Autumn 2010 AND GOD DAMN EPIC MICKEY
Maybe you delay Zelda, but you definitely don't delay anything else slated for next year. 2010 was already looking pretty iffy for Zelda, so if it launched in 2011 with a new system, that wouldn't be a big surprise.
 

BikoBiko

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Dec 5, 2008
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Great, let's see what they'll do to get sales back on track. Different colors, more bundles for Wii (in the West) and of course games!