Nintendo reforecast revenues, expects loss of 65 billion Yen

Company’s latest forecast paints a gloomy picture for the company for next quarter, blames both internal and external influences on financial performance

Whether one plays video games or not becomes irrelevant as everyone who has not been living under a rock has heard the name Nintendo at one point or the other in their life. Be it on a box at Toys’R’Us, on the showroom floor of a number of expos or in the
living room of someone they know, Nintendo is almost everywhere.

However, the once financially sound company has hit a troubled patch with 2011 being a largely forgettable year for the company and it seems that the first few months of 2012 will be continuing that trend.

The company has gone from a Net Profit of 49.5 billion Yen from around this time last year, to a staggering loss of 48.3 billion Yen this time around. The sales revenue has also fallen by 31.2% over the past few years.

A number of reasons have been outlined by the company for the turnaround in performance, with the poor figures from the Nintendo 3DS’s launch period being one of them. The 3DS has a horrid start as it barely managed to move any units off shelves and a major
price cut was announced for the handheld console.

The price cut seems to have worked with the 3DS ending 2011 as the most sold console in the market, however the slash in prices means that expected sales revenue figures were not met.

At the same time the Yen also appreciated in value against other currencies which meant that the 3DS became more costly to import for other countries and thus reduced sales.

To cap things off the company also cut prices on its current generation console, the Nintendo Wii, which led to an increase in sales but again did not help as much as expected in terms of meeting the expected forecasted figures.

Yet, analysts have predicted that 2012 could see things turn around for the company and it depended mostly of software sales for the 3DS as well as the launch of the Nintendo Wii U.

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Posted by Musa Afridi on Jan 26 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry