Nintendo's First-Quarter profit Triples on Wii, DS; Raises Forecast
Nintendo said its quarterly operating profit more than tripled, driven by stellar demand for its DS and Wii game gear, and it raised its annual outlook above market expectations, helping its shares trim their loss.
Nintendo's strategy to expand the gaming population beyond hard-core gamers to women and the elderly by offering innovative and easy-to-play games paid off handsomely as its DS handheld player and Wii console have outsold rival Sony and Microsoft machines monthly.
Underscoring its growth momentum, the Kyoto-based company last month shot past Sony in market capitalisation and became one of Japan's 10 most valuable companies, joining the likes of Toyota Motor and Honda Motor.
For the year to March 2008, the Kyoto-based company revised up its operating profit forecast by 37% to 370 billion yen (US$3.09 billion), compared with a consensus of a 304.6 billion yen profit in a poll of 20 analysts by Reuters Estimates.
Nintendo's DS lets users control play with a stylus instead of manipulating a keypad, while the Wii, which competes with Sony's PlayStation 3 and Microsoft's Xbox 360, comes with an unusual motion-sensing controller that can be swung like a bat or a sword.
The creator of such game characters as Mario, Zelda and Donkey Kong raised its sales forecast for the Wii by 18% to 16.5 million units for the current business year, while lifting its DS sales target by 18% to 26 million units.
Operating profit totaled 90.63 billion yen in April-June, up from 28.8 billion yen a year earlier. Net profit jumped fivefold to 80.25 billion yen.
Nintendo shares rose 32% in April-June, while the Nikkei 225 Averagegained 5%.