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Nintendo lowers sales and profit forecasts

DS and Wii expected to top 100 million and 50 million this quarter.

 

Nintendo shared today revised earnings expectations for the year ending March 31, 2009. The company expects record sales but lower net income.

For the full year period, the company expects sales to reach 1,820,000 million yen, an 8.8% increase over last year. However, it expects a drop of 10.6% in net income from last year to 230,000 million yen. The sales figure would be the highest in Nintendo's history, while the net income figure would be the second highest.

Looking at operating income, an indication of Nintendo's performance in its core business, the company expects to make 530,000 million yen. This would be a record number for the firm.

All figures are lower than Nintendo's revised forecasts from October of last year. The company originally forecast 2,000,000 million yen in sales and 630,000 million in operating profit. The lowered figures are due to the rising yen. Nintendo's original forecasts were based on an exchange rate of 100 yen to the dollar. The new estimates use a 90 yen to dollar ratio.

Nintendo also modified shipment expectations for both the Wii and DS. Pointing to increased domestic demand for the system following the release of the DSi, Nintendo bumped up its forecast for the DS by one million units to 31.5 million. For the Wii, despite strong sales overseas, due to less-than-expected domestic sales, the company lowered estimates by one million to 26.5 million units. This was actually the original expectation for the system prior to the October revision.

The DS and Wii have sold, respectively, 96.22 million and 44.96 million systems worldwide as of December 2008. Nintendo's sales forecasts call for 5.88 million additional DS systems and 5.98 million additional Wii systems to be sold by the end of March, indicating that the systems will cross, respectively, the 100 million and 50 million marks.

As a contrast to the DS's success, the Game Boy was the first and last portable machine to reach the 100 million mark (DS surpassed Game Boy Advance in the first half of this fiscal year). It reached the feat in 2000, eleven years after its initial release. The DS will have managed the feat in just over four years.

Nintendo also shared specifics on its software sales for the first three quarters of the year, covering April through December.

Looking just at first party sales, a total of eleven Wii titles topped the million mark over the period, with six managing to cross three million. For the DS, the company had fifteen titles above the million mark, including four above the three million mark.

The best selling Wii title for the nine month period was Wii Sports, with 18.95 million units for the period bringing its total sales since release (including hardware bundle units) to 40.50 million. Mario Kart Wii sold 13.67 million units in this, its first year of release. Wii Fit sold 12.16 million units for a total of 14.01 million. Wii Play managed 9.4 million units this year, bringing its life-to-date to 20.91 million.

The company expects software sales for the Wii and DS to reach 193 million units each this year. This would bring total life-to-date software sales for the platforms to, respectively, 312,220,000 and 533,380,000 units.

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