Nintendo profits to double this year after getting back in the black

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By Larry Banks

Japanese video games company Nintendo said today that it forecast annual operating profits to double in the year through March, with its smartphone games widely expected to help offset weak sales growth of its traditional consoles.

Nintendo profits to double, still remains third in the console market

Nintendo’s Wii U console has been a distant third place to Sony’s PlayStation and Microsoft’s Xbox, while the rise in smartphone games has also meant that fewer people are playing console games in general.

The company has repeatedly resisted calls to branch out to mobile to increase profits, but in March, it partnered with DeNA to develop games that the latter hopes to bring in more than $25 million a month.

DeNA said the two companies would release their first game later in 2014.

“A new source of revenue is expected from a gaming application for smart devices which will be released this year”, Nintendo said in its earnings release, while it did not announce any new details of the DeNA partnership.

Nintendo Wii U
The Nintendo Wii U lags behind the PlayStation and Xbox.

From the year April 1st, Nintendo forecast operating profits would double to 50 billion yen in the year until next March, more than the 39 billion forecast of most analysts.

Nintendo booked an operating profit of 24.8 billion yen for the previous year, going back to the black for the first time in four years as lower costs offset weaker revenue.

The firm says new games would help boost sales of the Wii U and 3DS in the coming year, but forecast Wii U sales to be pretty flat at just 3.4 million consoles, with the 3DS falling to 7.6 million from 8.7 million a year earlier.

Shares in Nintendo closed down 2.5% ahead of the earnings release, set against a 1.2% fall in the broader market.

SOURCE: Reuters

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