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Slow Cube sales drag down Nintendo profits

PSP looms

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gamesindustry.biz logo Nintendo has reported a 36.8 per cent fall in net profit for the year ended March 31 due to poor sales of GameCube hardware and games - but the company still posted a 67.72 billion Yen (€494 million) annual profit.

The results are broadly in line with Nintendo's most recent forecasts, made in April, although they are well below original projections; as recently as last November the company was predicting annual profits of 80 billion Yen (€583 million).

The group's sales fell 9.1 per cent during the year, to 504 billion Yen (€3.68 billion). The figures still leave Nintendo as one of the largest and most profitable companies in the industry by quite a wide margin, but they also belie the fact that the GameCube hardware and software sales are both weak, and even the phenomenal success of GBA and GBA SP cannot make up those figures.

For the forthcoming year, Nintendo's forecasts predict a profit of 65 billion Yen (€475m) on sales of 550 billion Yen (€4.01 billion) - a rise in sales, but a slight drop in net profits, possibly due to additional spending on product development and new lower licensing fees designed to attract more third party support to the Cube.

Perhaps more worrying than these financial figures (which are healthy, if not exactly stellar), however, is the reaction of the stock market to Sony's announcement of the PlayStation Portable at E3 last week. Nintendo shares lost 12 per cent of their value on the news, which was clearly seen as a major shot across the bows of the company's core handheld gaming business - despite the fact that the PSP is still 18 months away from market, and few solid specifications of the system or details of software or pricing are available.

© gamesindustry.biz

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