Nintendo returns to profit on weak yen boost
Nintendo Co. returned to profit for the fiscal year ended March 31 as a lift from the weakening yen offset sales struggles caused by software delays for its latest home console Wii U.
The Kyoto-based maker of Super Mario and Pokemon games reported Wednesday an annual profit of 7.1 billion yen ($72 million), a reversal from a 43 billion yen loss the previous year.
Annual sales dipped 1.9 percent to 635.4 billion yen ($6.4 billion).
Both profit and sales results were slightly worse than the projections of analysts surveyed by FactSet.
The dollar has been trading at 95 yen levels in recent months, and is now above 99 yen, up dramatically from 80 yen a year earlier—a boon for Japanese exporters like Nintendo.
Nintendo gained 39.5 billion yen ($399 million) from a favorable exchange rate for the year.
Nintendo expects profit to balloon to 55 billion yen ($555 million) this fiscal year ending March 2014. It did not break down quarterly results.
Still, Wii U sales at 3.45 million units fell short of Nintendo's target for the fiscal year of 4 million units.
That had been lowered from an earlier more optimistic projection of 5.5 million units.
The Wii U, which went on sale late last year, was the first major new game console to arrive in stores in years.
Game machines have lost some of their appeal with the arrival of smartphones that also offer gaming, and other pastimes such as social networking that are vying for people's leisure time.
Nintendo has repeatedly boasted it appeals to so-called casual gamers, unlike its rivals Sony Corp. and Microsoft Corp. But those are precisely the people who may be switching to playing games on other devices.
Sony is promising the PlayStation 4 before the year-end holidays, a critical sales period for game makers. Microsoft may also have a new home console.
Nintendo acknowledged it had failed to keep the momentum going on the Wii U because of a lack of game software, and promised to do better in the latter half of the year.
Nintendo posted its second straight annual operating loss, reporting 36 billion yen ($364 million) of red ink for the fiscal year ended March.
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