Nintendo has stated that it will end up selling four million Wii-U because of disappointing sales. The console has not been received well by consumers and the Japanese game developer has ended up slashing its previous forecast by 27%. However, Nintendo still expects to make a profit this year because the Yen is weak compared to other currencies. The well known game maker actually ended up increasing the predictions for yearly net profits to 14bn yen because of the currency.
The current results are in stark contrast from a year ago when Nintendo incurred a43bn yen loss. The current results show a 14.5bn yen profit for the first nine months of the year while the same period last year had a 16.4bn loss.
Nintendo announced its results after the Tokyo Stock Exchange was done trading for the day. Analysts will have a hard time deciding about the stock now because thews has both good and bad results. Observers will be concerned by the weak sales of Wii-U in the face of competition from tablets and smartphone games. Nintendo was looking to combat the competition with its console but has been unsuccessful and that does not look good in the long term. The company also cut the predicted sales of other consoles it produces. The company expects 15 million 3DS units to sell by March and DS to get 2.3 million. This is a drop of 14% and 8% from previously expected numbers.
Another piece of bad news from the announcement was that Nintendo now predicted that it would have an operating loss of 20bn yen. Interestingly, the company had previously thought they would be making a 20bn-yen operating profit for the year.
Nintendo claimed that the latest numbers also took into consideration the latest ground realities including the election of Prime Minister Shinzo Abe. The PM’s strong thoughts about expansion, government spending and monitory policy have caused the currency to weaken. Nintendo has gotten the better end of the deal because of this and now has higher valued foreign currency assets.
Source: BBC
Image: TechGuru
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