Nintendo reports $350 million profit, reversal from red ink

Staff Writer
Columbus CEO

TOKYO (AP) — Nintendo Co. reported Thursday a net profit of 41.8 billion yen ($350 million) for the fiscal year through March, a reversal from deep losses the previous year, as it reshapes its troubled business with a long-delayed foray into smartphone games.

The result from the Kyoto-based maker of Super Mario video games and the Wii home console was better than its own forecast for a 30 billion yen ($251 million) profit. It was in line with the forecast in a FactSet survey of analysts.

Nintendo, which did not break down quarterly figures, reported a loss of 23.2 billion yen the previous fiscal year, as sales of the new Wii U machine continued to lag, falling short of company expectations.

It had reported losses for the two fiscal years before that, so the company was in the black for the first time since the fiscal year ending in March 2011.

Nintendo did an about-face recently and said it's entering smartphone games, a segment it brushed off for years as irrelevant, insisting on its machines that are devoted to games.

It announced in March that it was entering an alliance with Japanese mobile game company DeNA Co. to develop games for mobile devices.

The falloff in appetite for game machines over the years is partly because people are increasingly playing games or doing social media and other activities on smartphones instead. Nintendo has repeatedly had to lower prices on gadgets to woo buyers.

Nintendo pioneered games, developing one of the first machines on the market, as well as the hit Game Boy handheld, since the1980s.

Its main rivals in the business are Sony Corp. with the PlayStation machines and Microsoft Corp. with the Xbox One machine. Both companies have done better in adapting to the era of online and mobile games.

Nintendo's fortunes have gotten a perk from the recent relatively favorable exchange rate. The dollar has been strengthening, and a strong yen had in the past battered Nintendo earnings.

The dollar was trading at about 120 yen this week, up from about 100 yen a year ago.

Nintendo's sales for the fiscal year dipped nearly 4 percent to 549.8 billion yen ($4.6 billion).

Nintendo is expecting profit for the fiscal year through March 2016 to climb to 35 billion yen ($293 million), up 16 percent from the fiscal year ended March this year, as Pokemon characters and Luigi the plumber start arriving on smartphones and tablets.

It did not give details, except to say: "A new source of revenue is expected from a gaming application for smart devices which will be released this year."

Annual sales are projected to rise nearly 4 percent to 570 billion yen ($4.8 billion).

Nintendo is expecting to sell 3.4 million Wii U machines for the fiscal year through March 2016, more than the 3.38 million sold for the fiscal year just ended.


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