Jul 30, 2009 (10:07 AM EDT)
Nintendo Profits Tumble
Read the Original Article at InformationWeek
Nintendo on Thursday reported that profits plummeted 60% in the first fiscal quarter, due in part to a lack of new blockbuster video games that hurt Wii console sales.
The Japanese company said Wii sales for the quarter ended June 30 fell by more than half to 2.23 million units from 5.17 million units in the same period a year ago. Sales in the United States fell by nearly two-thirds to 880,000 consoles and more than half in Japan to 21,000 units.
"There were fewer blockbuster software titles that briskly drove hardware sales this quarter versus the same period a year ago when titles like 'Mario Kart Wii' and 'Wi Fit' were launched in overseas markets," the company said.
Console sales are driven by the popularity of games available for the platforms. In March, Nintendo president Satoru Iwata said the company had sold more than 50 million Wii consoles since its release in November 2006 and credited game developers for the success.
A scarcity of big titles in May helped drive down overall sales for the video-game industry in the United States to its lowest level in nearly two years, according to the NPD Group. Sales of video games, consoles, software, and accessories fell below $1 billion for the first time since August 2007. The biggest decline was in hardware sales, which fell 30% from a year ago.
Nintendo said April-to-June profit dropped to 42.3 billion yen, or $445 million, from 107 billion yen, or about $1.1 billion a year ago. Revenue fell to 253.5 billion yen, or $2.7 billion, from 423.4 billion yen, or $4.4 billion.
For the full fiscal year ending in March 2010, Nintendo forecasts net income of 300 billion yen, or $3.1 billion, which would represent a 7.5% increase over the previous fiscal year.
Nintendo competes with Microsoft and Sony, which make the Xbox 360 and PlayStation consoles, respectively.