Nintendo revises down DS software sales forecast

Nintendo substantially cut its estimate for the amount of Nintendo DS software it expects to sell in the current fiscal year, while raising its forecast for hardware sales of the recently launched portable gaming device. The revision was made as the company announced its results for the first nine months of the financial year on Wednesday.

Nintendo said it expects DS software sales in the period from its Nov. 21 launch until the end of March to total 10 million units, down sharply from its previous prediction made in October of sales of 15 million units. Hardware sales in the same period are expected to amount to 6 million units, an increase from its previous forecast of 5 million units.

The lower-than-expected sales of DS software were due in part to users choosing to play the pre-installed PictoChat game, according Makoto Wakae, a spokesman for the Kyoto company. Additionally, some customers are using previously purchased GameBoy Advance software and haven't felt the need to initially buy as many DS-specific games as Nintendo had forecast. However, the company believes that its customers will soon starting buying new software, Wakae said.

As a result of the sales forecast revision, the company also revised its financial forecasts downward for the year to the end of March. Nintendo said it expects consolidated net sales to be YEN 520 billion (US$5 billion), a drop from the previously forecast YEN 540 billion, while net income is now forecast to be YEN 70 billion, a drop from the prior forecast of YEN 90 billion. Despite the revisions, consolidated net sales and net income are still expected to grow by 1 percent and 111 percent respectively for the year.

Nintendo reported sales of DS hardware in the period between its launch and the end of December totaled 2.8 million units, and software sales were 5 million units.

The DS device was launched in the U.S. on Nov. 21 and in Japan on Dec. 2. Regional figures from Nintendo show a much lower rate of software sales in Japan than in the U.S. In both markets the company sold roughly equal numbers of hardware: 1.4 million units in the U.S. and 1.5 million in Japan, though software sales in the U.S. totaled 2.9 million units against 2.1 million in Japan.

This is largely because the DS was more often sold in a bundle with software in the U.S. or because it was a given as a gift with software, said Wakae. In Japan, many of the company's customers were buying it for themselves, he said.

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Martyn Williams

IDG News Service
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