Nintendo Co. (7974) posted second-quarter profit that beat analyst estimates, helped by a weaker yen that boosted the value of overseas sales and demand for new games including Super Smash Bros. and Mario Kart 8.
Net income was 24.2 billion yen ($224 million) in the three months ended Sept. 30, compared with a loss of 8 billion yen a year earlier, according to figures derived from first-half results the Kyoto, Japan-based company reported today. That compares with the 5.74 billion yen average profit of four estimates compiled by Bloomberg. The company booked a 15.5 billion yen gain in the fiscal first half from the weaker Japanese currency.
President Satoru Iwata is releasing new titles and a lineup of figurines that interact with games to help revive the Wii U game console during the holiday shopping season as overseas sales are bolstered by the sliding yen. Nintendo maintained its annual forecasts as it counts on software to drive demand for hardware and stem a shift by consumers to smartphones and Sony Corp.’s PlayStation 4.
“Nintendo has a few titles coming out for the holiday
season, and the attention is on how much they’ll contribute to
earnings,” Hideki Yasuda, a Tokyo-based analyst at Ace Research
Institute, said in a phone interview today. “Full-year results
will hinge on the performance in the fiscal third quarter.”
Second-quarter sales fell to 96.7 billion yen from 115 billion yen a year earlier. Nintendo left unchanged its forecast for full-year profit of 20 billion yen and sales of 590 billion yen.
Weaker Yen
The Japanese yen has weakened 2.5 percent this year amid Prime Minister Shinzo Abe’s efforts at spurring inflation. The yen traded at 108.01 against the dollar as of 4:06 p.m. in Tokyo today.
Nintendo rose 0.2 percent to 11,120 yen at the 3 p.m. close of trading in Tokyo, before the earnings announcement. The shares have declined 21 percent this year, compared with a 2.4 percent drop in Japan’s benchmark Topix index.
Iwata, Nintendo’s president since 2002, underwent surgery in June to remove a bile-duct growth. He said today he’s back working a regular schedule at the company.
The company maintained its full-year sales targets for the 3DS handheld player, the Wii U console and software titles for both, it said in today’s statement.
The newest version of the 3DS, which features additional buttons and a faster processor, went on sale in Japan on Oct. 11. Nintendo plans to start selling the devices in Australia on Nov. 21 and hasn’t announced dates for other countries.
3DS Sales
Nintendo sold 2.09 million 3DS players and 23.3 million software units for the machine in the fiscal first half, the company said today.
“The new 3DS is selling very well,” said David Gibson, head of research at Macquarie Group Ltd. in Tokyo.
Super Smash Bros. for 3DS, which was released in Japan on Sept. 13, sold 3.2 million units as of the end of the month, Nintendo said today. The game was released for 3DS on Oct. 3 in North America and Europe as Nintendo adapted it for portable play after success on the earlier Wii console.
“Smash Bros. is actually a game for consoles” rather than handheld systems, Eiji Maeda, a Tokyo-based analyst at SMBC Nikko Securities Inc., said before the earnings release. The Wii U version, which will be released in the U.S. on Nov. 21, could boost Wii U hardware sales, Maeda said.
Sales of the Wii U have picked up since the release of Mario Kart 8 in May. Nintendo sold 1.12 million of the devices in the first half and 9.4 million software units for the machine, the company said today.
Squids, Zelda
The company maintained its projection to sell 3.6 million Wii U consoles across the full year.
Nintendo will release two Pokemon games for the 3DS and Captain Toad: Treasure Tracker for the Wii U in time for the holiday shopping season.
By next year, the company plans to introduce several new titles including Splatoon, which lets two teams take on roles as squids that morph into people and shoot different-colored ink in timed matches. It will release a new Zelda game, a title called Xenoblade Chronicles X and a Mario racing game that lets users make their own courses.
The company is also entering the multibillion-dollar, collectible-toy market with its Amiibo figurines, which are similar to Activision Blizzard Inc.’s Skylanders. Players can enter a Nintendo character into a game through the Wii U’s GamePad tablet.
