Nintendo profit dives as Wii magic fades

Rudolph Muller

Rudolph Muller is the editor at MyBroadband and covers telecoms and broadband news. Rudolph comes from an academic background, but left the University of...

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Sales of Nintendo’s hit Wii console have plunged, triggering a sharp drop in the video game titan’s profits after years of spectacular growth, the company said on Thursday.

Nintendo has been riding high in recent years after trumping rivals Sony and Microsoft in the battle for dominance of the multi-billion dollar home video game industry with its family friendly Wii.

But the console’s worldwide appeal appears to be fading, with sales dropping to 2.23 million units in April-June, down from 5.17 million a year earlier.

Together with a stronger yen, the weak demand pushed Nintendo’s net profit down 60.6% in the quarter from a year earlier to 42.32 billion yen ($445 million). Revenue slid 40.1% to 253.50 billion yen.

“In the console business, there were fewer blockbuster software titles that briskly drove hardware sales,” a company statement said.

Nintendo has enjoyed huge success with its consoles, including the Wii, which aims to appeal to people buying a video-game machine for the first time.

But the group expects its first drop in operating profit in four years, underlining the challenge it faces in maintaining its recent rapid growth.

The video game giant is pinning its hopes on new games and software such as Wii Sports Resort, a sequel to the popular Wii Sports that recently went on sale in Japan in June, to energise sales.

It maintained its forecast to sell 26 million Wii consoles and 30 million DS machines in the full business year to March and grow net profits by 7.5% to 300 billion yen, which would be a record.

Operating earnings are seen slipping 11.8% to 490 billion yen and revenue is seen dipping 2.1 percent to 1.80 trillion yen, unchanged from its previous projections.

Nintendo Wii sales down – discussion