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Nintendo predicts loss

Decline in profits linked to losses from foreign exchange rates.

Japanese console giant Nintendo has revised its financial projections for the year, dropping its full-year profit outlook by 5 billion Yen and projecting a loss of 3 billion Yen in the first half, which ended in September.

The lower projections are blamed on losses from foreign exchange rates, a factor which Nintendo has proved to be very sensitive to in the past due to its massive reserves of cash and other assets held outside Japan.

For the six months ended September 30, the company had originally projected a profit of some 15 billion Yen (€116 million), but now expects to record a loss of 3 billion Yen (€23.2 million), with the weakness of the US dollar likely to be a major culprit in this loss.

The company is still on target for a large profit for the full year, however, although its projections in this area have also been reduced. It had originally predicted 65 billion Yen (€503 million) profits for the year, but has now dropped this projection to 60 billion Yen (€464.4 million), bringing it below the half billion Euro profit mark.

This is of course still a massive profit for the Kyoto-based company, and demonstrates the incredible financial underpinning of the company's console hardware and software strategies. However, the loss in the first half is embarrassing for Nintendo, which generally posts profits, and will inevitably be jumped upon by the company's critics as evidence of a decline in the console maker's fortunes - even if the truth of the matter is that it's entirely down to fluctuations in the currency markets.

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GamesIndustry International


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