Nintendo profits fall 61% as Wii sales slump

The company saw a sharp fall in Wii and DS sales during the April to June quarter but still expects a profit this year

A sharp fall in global sales of Nintendo's popular Wii console and a less dramatic slowdown in sales of the portable DS pushed down the company's sales and profits in the April to June quarter, the company said Thursday.

Nintendo said net profit for the three-month period was ¥42 billion (US$443 million as of the last day of the period being reported), down 61 percent on the same period last year, while sales dropped 40 percent to ¥253 billion.

Sales of the Wii dropped more than half compared to the same period last year to 2.2 million units during the quarter.

The drop was largest in the Americas, where unit sales fell 65 percent, and in Japan, where they declined by 60 percent. Unit sales in other markets, including Europe, fell 47 percent, Nintendo said.

In the handheld market, the company saw unit sales of its DS drop on the same period last year by a million units to 6 million.

Nintendo developed a new version of the DS, called the DSi, in response to falling sales and launched it in Japan late last year.

The DSi was introduced to Europe and the Americas at the beginning of the April but sales during the quarter were still lower than the same period last year. They only rose in Nintendo's home market of Japan.

In addition to the lower unit sales Nintendo was also hit by the Japanese yen, which has strengthened against both the U.S. dollar and euro since the April to June quarter of last year.

The strong yen increases the price of its products that are made in Japan and also reduces the value of sales and profits made overseas when that money is returned to Japan.

Software sales for both the Wii and DS also fell. Nintendo said 29 million Wii games and 31 million DS games were sold during the period.

Those figures represent declines of 20 percent and 23 percent respectively against the same period last year. Nintendo attributed the drop to fewer hit titles being released during the quarter.

For the April to March 2010 fiscal year Nintendo said it expects to record a net profit of ¥300 billion on sales of ¥1.8 trillion.

The figures are unchanged on forecasts made earlier. Last year Nintendo achieved a net profit of ¥279 billion on sales of ¥1.84 trillion.

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Martyn Williams

IDG News Service
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