This month’s Wii and DS report
Submitted by Gaming Briefs and Nostalgia Bits
Nintendo reports strong sales for both of these consoles:
TOKYO (AP) - Nintendo Co.’s net profit surged 47.7 percent to a record high, powered by strong sales of software and accessories for its popular Wii video game console and brisk sales of its DS handheld devices.
The Kyoto-based company reported a group net profit of 257.34 billion yen ($2.5 billion) for the March-April period compared with 174.29 billion yen a year earlier. Sales shot up 73 percent to 1.672 trillion yen ($16.2 billion).
The video game industry performed well despite a slowing global economy. Nintendo said it would continue expanding the gaming audience to both novices and experienced users - a strategy that has paid off against rivals Sony Corp. and Microsoft Corp.
Nintendo said it sold 18.61 million units of its Wii console globally last year, for a total of 24.45 million units moved since it was launched in November 2006. The company also sold 30.31 million units of the DS worldwide.
Nintendo expects to continue its growth this fiscal year through March 2009, though at a more modest pace. It projects a 26.3 percent rise in net profit to 325.0 billion yen ($3.15 billion), a 7.6 increase in net sales to 1.800 trillion yen, and an 8.8 percent climb in operating profit to 530.0 billion yen ($5.14 billion).
“Nintendo’s strategy is to accelerate the current sales momentum from ‘must-have for every family’ to ‘must-have for everyone’ by continuously introducing new and unique software and introducing new services which take advantage of its expanded installed base,” the company said in its report.
One problem now though, is that they’re also declining to make price cuts for the Wii:
TOKYO (AP) - Nintendo does not plan to cut prices of its popular Wii gaming console or DS handheld game system anytime soon, the company’s president said Friday.
While the price of hardware is usually reduced over time, that could leave gamers who bought early feeling ripped off, Satoru Iwata said a day after the company reported record annual profits.
“I don’t think that model is correct,” Iwata said, despite signs that sales of the DS may be tapering off.
The Wii retails for about $250 in the U.S. and 25,000 yen in Japan, unchanged since its launch in November 2006. In contrast, Sony has slashed the price of its 20-gigabyte PlayStation 3 twice so far to boost demand.
Nintendo Co. expects to sell 28.0 million DS units this year through March 2009, down from 30.3 million last year.
Iwata said that while sales in Japan have slowed, the DS maintains strong momentum in the United States and Europe, with considerable room for growth. The DS Lite sells for 16,800 yen in Japan and $129.99 in the U.S.
Nintendo’s main focus is to keep gamers playing by continually offering new software, services and accessories. He hinted that there were new projects in the pipeline, but did not elaborate.
“Our biggest fear is for people who have bought the DS to shut it away in a closet,” Iwata said. “We want people to use it in their everyday lives.”
Still, the falloff in DS sales is a main reason why the company tempered its growth expectations this year after a nearly 48 percent surge in net profit last fiscal year to $2.5 billion and a 73 percent gain in global revenue to $16.2 billion.
“The speed last year was beyond our expectations,” Iwata said.
For this fiscal year, Nintendo projects a 26.3 percent rise in net profit and just a 7.6 percent increase in sales. It pegs a modest 8.8 percent climb in operating profit.
Like all Japanese exporters, Nintendo is wrestling with a stronger yen that threatens to erode the value of overseas sales, which accounted for 81 percent of total revenue last year.
Nintendo’s main driver of growth this year, then, looks to be the Wii - a runaway hit that has outsold Sony Corp.’s PlayStation 3 and Microsoft Corp.’s Xbox 360 since its release in November 2006.
With easy-to-play games and motion-detecting controllers, the Wii has done well by attracting new and casual gamers, including women and senior citizens.
Consumers around the world have snapped up nearly 24.5 million of the consoles so far, and Nintendo says it expects to sell 25 million units this year, even with a gloomy outlook for the global economy.
“Historically, the video game business hasn’t been influenced by economic swings,” Iwata said, adding that in tight economic times, people often opt to stay home and play video games rather go out and spend money.
Nintendo will release several new games this spring, including a racing game called the Mario Kart Wii. The Wii Fit exercise game, which has sold well in Japan, will also make its debut soon in the U.S. and Europe.
I think they’re making a mistake not to cut the price. Really, I do, because it could increase the number of buyers, IMO.
