Nintendo (NTDOY) cut both its calendar second- and third-quarter estimates and its forecast for the year ending March 31, 2011, as the video game maker cited weak sales and stronger-than-expected appreciation of the Japanese yen. The company also said its new handheld 3-D video game console wouldn't be released until after the holiday season.
The company will have a net loss of $23.9 million for the six months ending Sept. 30, compared to its prior profit forecast of $836.8 million, while revenue will be about $4.3 billion, down 35% from both its previous forecast and year-earlier sales, Nintendo said in a statement Wednesday. A year earlier, profit was $830.9 million.
Additionally, Nintendo cut its profit forecast for the year ending March 31 by 55% to about $1.08 billion and said its revenue would be $13.1 billion, or 21% less than its previous forecast. For the year ended March 31, 2009, Nintendo earned $2.73 billion on $17.1 billion in sales.
Along with competitors Microsoft (MSFT) and Sony (SNE), Nintendo has been hurt by the reduction in gamer spending, as more cash-strapped customers avoid new titles and consoles in favor of used games or free titles that can be downloaded from the Internet. NPD Group said earlier this month that total year-to-date U.S. videogame sales through August fell 8% from a year earlier to $8.37 billion, with hardware sales plunging 12%.
Additionally, Nintendo's 3DS device, which allows gamers to play 3-D games on a handheld device without using special glasses, will not be sold in time for the holiday season. Nintendo said in a separate release today that the 3DS will go on sale in Japan on Feb. 26. The device, which will be compatible with Nintendo DS software, will sell for a retail price of about $300, said Nintendo, which added that 3DS release dates for other parts of the world would be announced at a later date.
Investing Like Warren Buffett
Learn from one of the world's best investors.View Course »