Nintendo Still Racking Profilts

Nintendo racked up a record operating and net profit in the fiscal year ended in March

Japan's Nintendo Operating Profit More than Doubles on Strong Game Sales

With still strong demand for its portable and home-use video game consoles and game software, Japanese video game maker, Nintendo, racked up a record operating and net profit in the fiscal year ended in March. The company's operating profit jumped to 487.22 billion yen, or $4.7 billion, from 226.02 billion yen in the previous year.

Although the growth in net profit was much slower than operating income due to the company incurred foreign exchange losses, the Kyoto-based maker of Wii and DS said net profit rose 47.7 percent to 257.34 billion yen. A rapid appreciation of yen hurts Nintendo as it reduces the value of foreign currency-denominated assets, which it reevaluates according to the exchange rate at the end of each fiscal year.

Revenue increased 73 percent to a record 1.67 trillion yen.

Nintendo said global sales of its Nintendo DS dual-screen portable game consoles rose to 30.31 million units from 23.56 million. The company also delivered 18.61 million Wii consoles, up from 5.84 million units in the previous year. Sales of both consoles exceeded the company's targets.

Accumulated sales of Nintendo DS reached 70.6 million units, making it the world's best-selling portable game machine. Wii had accumulated sales of 24.45 million units, making it the top-selling home-use game console, above Microsoft's Xbox360 and Sony's PlayStation 3.

Sony has long dominated the global home-use, standalone game console market with its PSOne and PlayStaion2, but due to the lack of strong game titles and relatively high price, PS3 has so far lagged behind the rival formats in terms of sales.

For the current year to March 2009, Nintendo aims to achieve another set of record earnings and sales.

Nintendo is expecting net profit to rise 26.3 percent to 325 billion yen, operating profit to climb 8.8 percent to 530 billion yen, and sales to be up 7.6 percent to 1.80 trillion yen.

The forecast assumes that the dollar will stand at 100 yen at the end of March 2009, down from 100.19 yen at the end of March 2007, and the euro will stand at 155 yen, compared to 158.19 yen. Based on those rates, the company expects a forex loss of 12 billion yen. Nintendo aims to sell 28 million Nintendo DSs, and 25 million Wiis this fiscal year.

'Because the sales of Nintendo Wii have already topped what is considered to be the up-limit line, it is not realistic to see any further growth in Japan,' spokesman Yasuhiro Minagawa told Thomson Financial News. 'But given the fact that DS is in a state of supply shortage outside Japan, we can expect sales growth in overseas markets,' he said.