Nintendo cuts profit outlook

January 29, 2009
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, TOKYO, Jan 29 – Japanese video game giant Nintendo Co. on Thursday cut its annual net profit forecast by a third, blaming a strong yen which offset robust sales of the Wii and DS machines.

Nintendo now expects a net profit of 230 billion yen (2.6 billion dollars) for the financial year to March.

It lowered its operating profit forecast by 15.9 percent to 530 billion yen and its revenue forecast by 9.0 percent to 1.82 trillion yen.

However, even though it expects to lose about 200 billion yen in profit, its annual "sales and operating profit is likely to book record highs," it said in a statement.

"The earnings forecast has been modified to reflect exchange losses impact due to yen appreciation," it said.

The yen recently soared to a 13-year high against the dollar amid the global financial crisis.

But Nintendo said it continued to enjoy strong sales of its innovative Wii home machine as well as its DS portable series.

Nintendo said it sold 20.52 million Wii consoles in the first three quarters, benefiting from strong demand during the holiday period.

For the nine months to December, Nintendo booked a net profit of 212.52 billion yen, down 18 percent from the previous year.

But operating profit rose 27 percent to 501.33 billion yen in the same period, with sales going up more than 16 percent to 1.54 trillion yen.

Nintendo has been seen as well-placed to escape the worst of the global economic crisis.

As companies around the world cut thousands of jobs, Nintendo has voiced hope that budget-conscious consumers will prefer to stay at home playing video games rather than go out.

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