Japan Earns Nintendo
Shizuo Kambayashi  /  AP
Customers take a look at a box of Nintendo Wii console at a Yodobashi Camera discount shop in Tokyo Wednesday. Surging sales of video consoles and games more than quadrupled profits at Nintendo Co. in the latest quarter and prompted the Japanese game maker to raise its earnings outlook by a hefty 40 percent for the year.
updated 7/25/2007 9:42:55 AM ET 2007-07-25T13:42:55

Surging sales of Nintendo's Wii and DS video games lifted the company's quarterly profit fivefold, prompting the Japanese game maker to raise its annual earnings forecast 40 percent.

Nintendo posted a net income of 80.25 billion yen ($667 million) for the April-June period, up from 15.55 billion yen a year earlier.

Sales more than doubled to 340.44 billion yen ($2.83 billion) from 130.91 billion yen the previous year, powered by brisk sales of Nintendo's handheld DS machine and its wand-wielding Wii console.

The Kyoto-based maker of "Pokemon" and "Super Mario" games also raised its annual profit forecast to 245.00 billion yen ($2.04 billion) from the 175 billion yen it forecast in April.

The Wii, with its user-friendly "Wiimote" — a motion-sensitive remote control wand that can be used as a sword, tennis racket or fishing rod, depending on the game — has trumped rival offerings in the next generation of video game consoles. The wand has made the game a smash hit among children, women and older players, not just hardcore gamers.

Eight months since its launch, the Wii has outsold more expensive and technologically sophisticated machines from Microsoft Corp. and Sony Corp.

Nintendo said it sold 3.43 million Wii machines worldwide in the April-June quarter, bringing total sales from the launch to 9.27 million units — 3.81 million in the Americas, 2.95 million in Japan and another 2.51 million elsewhere.

Nintendo expects to sell a total of 16.5 million Wii units in the fiscal year ending in March 2008, up from its previous forecast of 14 million.

To compete, Sony slashed U.S. prices for its PlayStation 3 game console by US$100 earlier this month to US$499 for the 60 gigabyte model. Microsoft's Xbox 360 has also sold sluggishly outside of its main U.S. market.

Earlier this month, Nintendo announced a further lineup of Wii accessories — a floor pad for exercise and dancing games, a steering wheel for driving games, and a gun-shaped "zapper" for shooting.

It has been a spectacular comeback for Nintendo, which had fallen behind Sony's PlayStation 2 in the previous generation of game consoles.

The company's resurgence isn't just based on the Wii. Nintendo said Wednesday the DS portable game console sold 47.27 million units worldwide since its launch in late 2004, far outstripping any other console on the market.

Nintendo has also been rolling out popular games, including its "Brain Age" brain-training game for the DS machine, which has been a global mega-hit.

Software sales are important because they create an upward spiral for Nintendo, lifting demand for its hardware, in turn triggering games makers to develop more games — a daunting prospect for rivals Sony and Microsoft.

Still, some figures show Sony's PS3 more than doubled U.S. sales in the two weeks since the U.S. price drop was announced, signaling heightened competition ahead.

Moreover, Nintendo has been struggling to deliver enough Wiis to meet demand, something that could hurt sales going forward. In April, Nintendo's president acknowledged that the shortage of the game machine was "abnormal," and promised to boost production and increase deliveries.

Nintendo shares, which have more than doubled in price in the last year, jumped 3.46 percent to 56,800 yen ($473.32) in Tokyo. The results were released before the market closed.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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