Japanese vidgame giant's profits fall 52%
Nintendo’s bottom line has taken a beating from plunging sales and the recent price cut on its popular Wii console.
Profits at the Japanese vidgame giant fell 52% during the first half of its financial year to $768 million on a 34% drop in sales of nearly $6 billion, the company said of the April-September period.
Weaker sales overall have plagued the videogame biz during the recession, with the industry down 13% for the first nine months of the year.
The Wii has been the bestselling console since its launch in late 2006, but with sales declining this year, Nintendo cut the price of the Wii by $50 to $200 in September.
Rivals Microsoft and Sony slashed the pricetags of their more expensive consoles last month, and doing so has paid off for the Xbox 360 and PlayStation 3, with sales growing significantly for both machines.
Nintendo sold 5.75 million Wii consoles from April through September, down 43% from the year-earlier period, when it moved 10 million units. Its DS handheld sales, also a strong seller over the years, is down 15% this year at 11.7 million units.
With the exception of “Wii Sports Resort,” Nintendo hasn’t released any high-profile games to boost interest in the Wii this year, hurting software sales, which are down 6% for the consoles. That will likely change this holiday when it launches “New Super Mario Bros. Wii.”
The company is still down on the rest of the year’s earnings potential, lowering expectations and setting the stage for the first annual decline in earnings for the company in six years. It now expects to sell 20 million Wii machines through March, down from 26 million.