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Cash Money Bling Bling!

by Billy Berghammer - November 5, 2001, 7:56 am EST
Source: Reuters

That's what Nintendo is screaming today. Nintendo's looking to be rather profitable this year.

Due to cheaper GBA parts prices, Nintendo has announced that they will be seeing extended profits for the half year that ended in September. Read on....

TOKYO, Nov 5 (Reuters) - Japan's Nintendo Co Ltd said on Monday that falling prices for key components in its Game Boy Advance game console would boost its profits for the half year that ended in September.


The world's second-largest home video game maker also said it had suffered almost no negative impact from the attacks on New York and Washington, aside from in the week immediately after September 11, and foresaw little fallout in the second half.

The comments came after the Nihon Keizai Shimbun business daily said the game maker would likely report a 29 percent jump in group operating profit for the six months through September, to around 51 billion yen ($418.3 million).

That was up from its earlier forecast of 45 billion yen.

``We have reaped the benefits of the drop in components prices, so that should give some boost to our profits,'' the spokesman said, declining to comment directly on the article published on Saturday.

Prices for liquid crystal displays and semiconductors, key components for its Game Boy Advance console, have been falling in the wake of a global info-technology slowdown, handing Nintendo a surprise windfall.

The expected higher profit nudged Nintendo's shares up as much as 4.4 percent in Monday afternoon trade. They closed up 4.09 percent at 20,100 yen, while the benchmark Nikkei average gained 0.61 percent.

The company will announce its 2001/02 interim results on November 21.

The newspaper said Nintendo's first-half earnings were also boosted by a weaker yen. A softer Japanese currency boosts the value of overseas sales, which account for about 70 percent of Nintendo's total sales.

Consolidated sales rose 18 percent to 225 billion yen in April-September, it said.

Sales of software for the Game Boy Advance, which debuted in March, were less than expected, but Pocket Monster software for the Game Boy Color console had sold briskly in overseas markets, the newspaper said.

The game maker's group net profit was expected to increase 17 percent to almost 35 billion yen, it said.


For the full-year ending in March, the creator of the wildly popular Pokemon game character expects group sales to rise 25 percent to 580 billion yen, unchanged from its earlier forecast, the Nihon Keizai Shimbun said.

The newspaper said Nintendo believed its initial target for Game Boy Advance annual sales of 21 million units was achievable, and therefore expected group operating profit for 2001/02 to rise 53 percent to 130 billion yen, above its earlier forecast of a profit of 120 billion yen.

In 2000/01, Nintendo's operating profit sagged 41.6 percent to 84.70 billion yen, battered by flagging sales of the ageing Nintendo64 game console that came to market in 1996.

The Kyoto-based company said on Monday it believed it could meet its sales target of four million GameCube game consoles. The successor to the Nintendo64 is its contender in the competitive next-generation game console market dominated by Sony Corp's PlayStation 2.

The GameCube, which saw a disappointing launch in Japan in September, will hit shelves on November 18 in the United States, following on the heels of the launch of Microsoft Corp's (NasdaqNM:MSFT - news) Xbox.

U.S. retailers expect PlayStation 2, launched in March of last year, to outsell the GameCube and the Xbox during the holiday season, according to a survey released last month by marketing services from PlayDate Inc.

Sony said last month that U.S. sales of PlayStation 2 had seen almost no impact from the economic slowdown or the September attacks.

Higher profits from PS2 after six consecutive quarters of losses helped its game division post a four billion yen profit for the July-September quarter, the electronics giant said.

($1 equals 121.92 yen)

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