Nintendo Raises Annual Profit Forecast to 90 Bln Yen
Nov. 25 (Bloomberg) -- Nintendo Co., the world's biggest maker of hand-held game machines, raised its annual profit and sales forecasts following the release of its newest portable video- game player on Sunday in the U.S.
Net income at the company behind game characters Donkey Kong and Mario the Plumber will probably total 90 billion yen ($876 million) in the 12 months ending March 31, compared with an earlier forecast of 84 billion yen and net income of 33 billion yen a year ago, the Kyoto, Japan-based company said today.
Nintendo expects profit to almost triple this year because of demand for its Nintendo DS player and game software. The company began selling the DS in the U.S. on Nov. 21, accompanied by a $40 million ad campaign aimed at protecting Nintendo's 95 percent share of the portable game market from Sony Corp.
Full-year sales will likely total 540 billion yen, up from an earlier estimate of 530 billion yen, Nintendo said today.
DS shipments for the fiscal year ending March 31 should total 5 million units, Nintendo said in the statement accompanying its release of final first-half earnings.
For the six months ended Sept. 30, net income totaled 46.4 billion yen, compared with a loss of 2.9 billion a year earlier, Nintendo said. Operating profit, or sales minus the cost of goods sold and administrative expenses, rose 39 percent to 40 billion yen in the first half from 28.8 billion yen a year earlier.
Market Dominance
The DS is at the center of Nintendo's push to defend its dominance of the $4 billion hand-held game market as Tokyo-based Sony prepares to enter portable gaming for the first time.
Sony will start selling it PlayStation Portable, or PSP, console in Japan on Dec. 12. The Tokyo-based company expects to ship 500,000 PSPs to Japanese retailers by the end of the year and 3 million worldwide by March 31.
The PSP will be able to play videos and music in addition to games using an optical disc designed by Sony, the company has said. Nintendo's DS has two screens, one of which is touch sensitive, and voice recognition capabilities.
With commercials built around the tagline ``Touching is Good'' and the DS's double screens, Nintendo's executives are putting a different face on a company known better for its fuzzy game characters than for sex appeal.
