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Nintendo Shares Down on U.S. Software Sales Warnin

by Mike Sklens - January 30, 2003, 3:54 pm PST
Discuss in talkback! Source: Yahoo News

Electronic Arts is so big they affect other companies' stocks!

TOKYO (Reuters) - Shares in Japan's Nintendo Co. Ltd. extended losses on Thursday after video game publisher Electronic Arts Inc. cut its forecast for North American software sales for the game maker's flagship GameCube console.

The stock, which hit its lowest level in nearly four years on Wednesday, ended down 6.14 percent at 9,480 yen, while the key Nikkei average dipped 0.17 percent.

Shares in Nintendo, maker of the hit "Pokemon" video games, have lost 53 percent over the past year.

Electronic Arts, North America's top video game publisher, said on Wednesday it expected GameCube software sales to grow by 15 to 20 percent this year in North America.

That is down from Electronic Art's previous estimate of 20-25 percent, while its estimates for rival game systems remain unchanged, said Jay Defibaugh, an analyst at Credit Suisse First Boston.

The game publisher forecast sales growth of 25-30 percent for Sony Corp's top-selling PlayStation 2, and 20-25 percent for the Xbox from Microsoft Corp GameCube and Xbox are fighting for the number two spot globally.

The revised forecast fueled worries among investors about slower-than-expected growth for GameCube in the United States, the world's largest video game market, Defibaugh said.

Investor sentiment was also battered because Electronic Arts indicated that it would look closely at sports titles for GameCube this year, suggesting it may reduce the number of games designed for the console, he said.

Late last year, Japanese game publisher Sega Corp said it might trim sports game titles for GameCube in North America to become more profitable.

Shares in Nintendo have been battered by growing concerns about slack GameCube business worldwide, although the firm's Game Boy Advance handheld system performed well during the recent holiday shopping season due to hit games in the "Pokemon" franchise.

"From the stock's valuation and the company's high cash position, there should be a supporting level somewhere," Defibaugh said.

But Nintendo's shares may stay under pressure in the short term due to the likelihood that news about GameCube will remain negative, he said.

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