Nintendo Reduces Annual Guidance for the Second Time

October 27 00:00 2011

New York, October 27 (RainbowNewsLine.com) – The former games industry leader, Nintendo Co Ltd has reduced its annual earnings guidance second time this year and brought it down to just break-even on Thursday. The immediate stimuli for this action were the soaring yen and weak software sales that dealt a fresh blow.

The operating loss of the company reached 19.6 billion yen ($258 million) for the third quarter, which was worse than its forecast and short of market expectations. In comparison, the company had posted a 30.9 billion yen profit in the same period last year.

Nintendo cut its full-year operating profit forecast to just 1 billion yen from 35 billion yen. The forecast for sales of 3DS software was slashed to 50 million units from 70 million units for the year to March but the forecast for 3DS hardware remained unchanged at 16 million units for the year.

Nintendo has been facing stiff competition from traditional rivals Microsoft Corp and Sony Corp. Of late, Apple Inc and Google have also entered the field and are making rapid advances making it more difficult for Nintendo.

The soaring yen has also brought down earnings of the Kyoto-based company, which generates 80 percent of its sales overseas because the value of profits repatriated from abroad is reducing drastically with the rise of the yen.

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