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Nintendo's Slashes Wii Sales Forecasts

Company blames appreciating yen and lack of system-selling titles for lowered earnings.

 

Nintendo's earnings reports are always a bit on the confusing side for the non investor types (like myself). On the one hand, they're making less money than they were making before. On the other hand, they're still making hundreds of millions of dollars.

Today, the Kyoto gaming giant shared its earnings report for the six months ending September 2009. Sales and earnings were both down sharply from the same period in 2008. Sales fell from 836,879 to 548,058 million yen. Operating income dropped from 252,183 to 104,360 million yen.

Got that? They still made a billion dollars. The problem is that last year, they made 2.5 billion. Expect investor rage shortly.

The announced figures were lower than previous forecasts. Previously, Nintendo had forecast sales of 700,000 million yen and operating income of 165,000 million yen.

As reason for the lesser performance, the company blamed the appreciating yen, the early September price cut of the Wii, and a lack of hardware-driving titles for the Wii.

Worldwide DS hardware sales reached 11.7 million units over the period, bringing the system's life-to-date total to 113.48 million. Software sales for the system reached 71.15 million units. Despite strong sales of Pokemon Heart Gold & Soul Silver, Friend Collection, and Dragon Quest IX in Japan, the company said that there were few noteworthy releases outside of Japan.

Wii sold 5.75 million units over the six month period, bringing its life to date total to 56.14 million units. Worldwide software sales for the Wii reached 76.21 million units.

For the full fiscal year, Nintendo expects to sell 30 million DS systems and 20 million Wii systems. The DS figure remains unchanged from past forecasts, but the Wii figure is down by six million. In software, it expects to reach 150 million DS games and 180 million Wii games. These are down, respectively, from previous forecasts of 180 million DS games and 220 million Wii games.

The company also lowered its overall sales and earnings forecasts for the year. Down from its original sales forecast of 1.8 trillion yen, the company now expects 1.5 trillion yen in sales. It lowered its operating income estimates from 490,000 to 370,000 million yen.

You can see Nintendo's full English language earnings report here.

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