Nintendo Profit Rises 31.5% on Wii Demand

Nintendo's quarterly profit rose 31.5 percent on the runaway success of its Wii game console, but the Japanese video game maker kept its annual outlook well short of market expectations.

Nintendo Wii
Nintendo Wii

The Wii, launched in late 2006, continued to enjoy strong demand worldwide thanks to its easy-to-learn motion-sensing controller, low price and innovative titles such as the "Wii Fit" exercise game.

It outsold Sony's PlayStation 3 and Microsoft's Xbox 360, putting Nintendo in the leading position in a three-way game console battle.

April-June operating profit at Nintendo, creator of iconic game characters such as Mario and Zelda, rose to 119.19 billion yen ($1.10 billion) from 90.63 billion yen a year earlier.

Net profit rose 33.7 percent to 107.27 billion yen on sales of 423.38 billion yen, up 24.4 percent.

In a move to further stir up Wii demand, Nintendo earlier this month unveiled "Wii Music," which lets players simulate more than 60 different instruments, taking itself into the fast-growing software segment pioneered by Activision Blizzard's "Guitar Hero."

For the year to March, Nintendo kept its operating profit forecast of 530 billion yen, up 8.8 percent on the year, but below a consensus of 597.1 billion yen in a poll of 20 analysts by Reuters Estimates.

Unlike many other industry sectors, the video game market has been little affected by economic slowdown, soaring oil prices and sluggish consumer spending, and industry executives hope that demand will hold strong through the critical holiday season.

The industry is forecast to reach $57 billion in revenues this year, according to research firm DFC Intelligence.

Ahead of the results, shares in Nintendo closed up 3.6 percent at 57,600 yen, outperforming the benchmark Nikkei average which rose 1.6 percent.

The stock lost 16.9 percent this year through Tuesday, while the Nikkei slid 14 percent.