carocat
10-01-2007, 09:28 AM
TOKYO, Jan 10 (Reuters) - Japan's Nintendo Co. expects annual profit to more than double this year to above market forecasts on strong sales of its DS handheld console and game software, sending shares up 2.4 percent.
Nintendo DS, which opens like a book and lets users control play with a stylus, has allowed the company to reach new user groups such as women and the elderly with software that includes "Nintendog", a pet training game, and quiz programmes.
To expand further in the world's $30 billion game industry, Nintendo is also betting on its new Wii console, which was launched for the year-end shopping season in the Americas, Japan and Europe, to fend off competition from Microsoft Corp.'s (MSFT.O: Quote, Profile, Research) Xbox 360 and Sony Corp.'s (6758.T: Quote, Profile, Research) Playstation 3.
Nintendo (7974.OS: Quote, Profile, Research) raised its operating profit estimate by 28 percent to a record of 185 billion yen ($1.6 billion) for the year to March 31, from a previous forecast of 145 billion yen. It posted a 90.3 billion yen profit last business year.
The surging sales of Nintendo's game products is contrasting to woes at Tokyo-based Sony, which last year had to cut its shipment target for its competing PlayStation Portable and delay the launch of its PS3 console. Sony expects a loss of 200 billion yen at its game unit this business year.
Analysts had expected Nintendo to post a profit of 155 billion yen, based on an average forecast from 17 brokerages compiled by Reuters Estimates.
The earnings upgrade "underlines the strength of the DS and that the Wii is off to a flying start", said Hiroshi Kamide, an analyst at KBC Securities.
Shares of Nintendo closed up 2.4 percent at 29,150 yen in Tokyo after the company announced its revised forecasts, against a 1.7 percent decline in the overall market. Sony stock fell 2 percent to 5,440 yen.
SURPRISE OUTCOME
Previously, analysts had feared that the DS and Wii, both of which were easy-to-play games, could end up taking customers from each other, hurting the company's overall sales.
But Nintendo President Satoru Iwata said the outcome has turned out otherwise.
"One of the reasons for the large upward revision is because DS sales were steady even after the launch of Wii," Iwata said during a news conference in Osaka.
"Also, demand typically shrinks after the Christmas season, but this year, we don't see demand slowing down," Iwata said.
Nintendo also lifted its revenue forecast by 22 percent to 900 billion yen from an earlier target of 740 billion yen. That compares with sales of 509.2 billion yen the previous year.
"At this rate they are going to be a 1 trillion yen sales company next year, which is pretty amazing," Kamide said.
The company, known for its Mario and Pokemon game characters, also raised its annual dividend forecast to 480 yen from an earlier estimate of 400 yen.
Kyoto-based Nintendo raised its sales target for the DS game player by 15 percent to 23 million units in the year to March. It also expects DS software sales to reach 100 million units, up from an earlier target of 82 million.
It also increased its sales forecast for Wii game software by 23.5 percent to 21 million units, while reiterating a target of six million units for the console itself.
Wii, which features a motion-sensitive controller which the users swings around to control the play, retails for about $250 in the United States, while Sony's high-end PS3 sells for $600, and premium Xbox 360 priced around $400.
Source/Reuters (http://today.reuters.com/news/articlebusiness.aspx?type=technology&storyID=nT214011&pageNumber=0&imageid=&cap=&sz=13&WTModLoc=BizArt-C1-ArticlePage2)
What do you think?
Nintendo DS, which opens like a book and lets users control play with a stylus, has allowed the company to reach new user groups such as women and the elderly with software that includes "Nintendog", a pet training game, and quiz programmes.
To expand further in the world's $30 billion game industry, Nintendo is also betting on its new Wii console, which was launched for the year-end shopping season in the Americas, Japan and Europe, to fend off competition from Microsoft Corp.'s (MSFT.O: Quote, Profile, Research) Xbox 360 and Sony Corp.'s (6758.T: Quote, Profile, Research) Playstation 3.
Nintendo (7974.OS: Quote, Profile, Research) raised its operating profit estimate by 28 percent to a record of 185 billion yen ($1.6 billion) for the year to March 31, from a previous forecast of 145 billion yen. It posted a 90.3 billion yen profit last business year.
The surging sales of Nintendo's game products is contrasting to woes at Tokyo-based Sony, which last year had to cut its shipment target for its competing PlayStation Portable and delay the launch of its PS3 console. Sony expects a loss of 200 billion yen at its game unit this business year.
Analysts had expected Nintendo to post a profit of 155 billion yen, based on an average forecast from 17 brokerages compiled by Reuters Estimates.
The earnings upgrade "underlines the strength of the DS and that the Wii is off to a flying start", said Hiroshi Kamide, an analyst at KBC Securities.
Shares of Nintendo closed up 2.4 percent at 29,150 yen in Tokyo after the company announced its revised forecasts, against a 1.7 percent decline in the overall market. Sony stock fell 2 percent to 5,440 yen.
SURPRISE OUTCOME
Previously, analysts had feared that the DS and Wii, both of which were easy-to-play games, could end up taking customers from each other, hurting the company's overall sales.
But Nintendo President Satoru Iwata said the outcome has turned out otherwise.
"One of the reasons for the large upward revision is because DS sales were steady even after the launch of Wii," Iwata said during a news conference in Osaka.
"Also, demand typically shrinks after the Christmas season, but this year, we don't see demand slowing down," Iwata said.
Nintendo also lifted its revenue forecast by 22 percent to 900 billion yen from an earlier target of 740 billion yen. That compares with sales of 509.2 billion yen the previous year.
"At this rate they are going to be a 1 trillion yen sales company next year, which is pretty amazing," Kamide said.
The company, known for its Mario and Pokemon game characters, also raised its annual dividend forecast to 480 yen from an earlier estimate of 400 yen.
Kyoto-based Nintendo raised its sales target for the DS game player by 15 percent to 23 million units in the year to March. It also expects DS software sales to reach 100 million units, up from an earlier target of 82 million.
It also increased its sales forecast for Wii game software by 23.5 percent to 21 million units, while reiterating a target of six million units for the console itself.
Wii, which features a motion-sensitive controller which the users swings around to control the play, retails for about $250 in the United States, while Sony's high-end PS3 sells for $600, and premium Xbox 360 priced around $400.
Source/Reuters (http://today.reuters.com/news/articlebusiness.aspx?type=technology&storyID=nT214011&pageNumber=0&imageid=&cap=&sz=13&WTModLoc=BizArt-C1-ArticlePage2)
What do you think?