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Nintendo Lowers Console Sales Targets

Slower sales and rising yen cause sharp earnings drop.

Donkey Kong Returns proved to be a major year-end hit, although not at the level of New Super Mario Bros. Wii.

Sales and earnings were down at Nintendo for the nine months ended December 31, 2010. In its quarterly earnings report yesterday (view the English PDF here), the company blamed the drops on slower sales and the ever appreciating yen.

Nintendo saw net sales of 807,990 million yen over the period, down 31.7% from the same period in 2009. Operating income was down 46.5% to 158,795 million yen, with net income down 74.3% to 49,557 million yen .

Similar to past quarters, the sharp net income drop was due in large part to the strong yen. In the previous year, Nintendo used a rate of 93.04 yen to the dollar. In the third quarter of this year, the rate was 81.49 yen to the dollar. Currency-related losses reached 84.4 billion yen.

Nintendo also saw drops across the board in hardware sales. Wii sold 13.72 million units over the nine months, down from the 17.05 million over the same period in the previous year. DS fell from 23.35 million to 15.7 million units.

Software sales appeared to be a bright spot. Sales of Pokemon Black & White continued to grow, the company noted. Console games like Super Mario Galaxy 2, Wii Party and Donkey Kong Country Returns were popular.

Nintendo issued some changes to hardware forecasts for the full fiscal year, which ends on March 31. The company expects to sell 16 million Wii systems, down from the originally forecast 17.5 million. DS targets call for 22.5 million units for the year, down from the originally announced 23.5 million units. This includes 4 million 3DS units, a figure that goes unchanged from previously announced forecasts.

Nintendo held an investor's meeting in Osaka yesterday to discuss the earnings. As reported at Reuters, the company said that it did not have a major hit towards the end of last year, in comparison to New Super Mario Bros. Wii in 2009. When asked about 3DS sales plans for the coming fiscal year, the company said that this will be determined after seeing how the system sells throughout the world in February and March. The 3DS hits Japan on February 26 and international markets in March.

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