Topic: Nintendo Announces Financials

[PGC-Agent Cooper]

Due to the high yen and lack of demand for consoles, Nintendo’s profits fall from last year.

Nintendo revealed it’s financials today, which were lower due to high yen, and weak demand for consoles.

Nintendo’s profits fell 44.8%, and they lost 29 billion yen ($236.4 million) in losses on foreign currency assets.

Operating profit shrank 45.5% due to the GameCube price cut in the US and Japan, Senior Managing Director Yoshihiro Mori announced in a news conference.

Group net profit for the six months to September was 18.97 billion yen ($154.6 million), down from last years 34.35 billion, while sales fell 7.8 percent to 208 billion yen.  

The disappointing results and currency losses offset a special gain of 19 billion yen from its sale of it’s share in Rare Ltd, formerly one of its closest partners, to rival Microsoft Corp, Nintendo said.

The downbeat performance was expected as the company trimmed its earning forecast last month, which prompted a share sell-off.  

Though sales are expected to rise 8.1 percent to 600 billion yen, an expected foreign-currency-related loss, instead of the profit last year, would hurt the bottom line, Nintendo said.  

In the first half, Nintendo sold 2.88 million GameCubes worldwide, which was much lower than the 12.88 million PlayStation 2 consoles shipped by Sony.  

Nintendo has trimmed its original 2002/03 shipment target for GameCube by 17 percent and for Game Boy Advance by 21 percent.   Nintendo hopes to bounce back in Japan when the new Pokemon titles hit store shelves on Thursday, and when Zelda launches in December. Mori said they have orders for one million units each of Pokemon Sapphire and Pokemon Ruby from retailers.

Mori also said it has no plan to reduce the price of GameCube in response to Sony slashing the price of the PS2 by 3000 yen in Japan, but it will spend more than 30 billion yen in advertising worldwide in the second half to promote its products.  

According to magazine publisher Enterbrain, Japan's game software market was down 13% to 114.5 billion yen year-on-year for April through September.