By Amy Gilroy
Hit by competition from Sony, Microsoft and Apple, Nintendo saw its annual profits fall for the first time in six years.
Profits fell 18 percent to about $2.5 billion for the fiscal year ended March 31, 2010, as Nintendo suffered from a price cut on the Wii console and softer global sales, said the AP. Nintendo is pinning its hopes on a 3D version of the DS that doesn’t require 3D glasses. “The new 3DS will create a new opportunity for us,” said Nintendo president Satoru Iwata, according to Bloomberg.
The 3DS should be unveiled in June at E3, but it won’t be enough to stop a further slide in profits next year, according to Nintendo’s forecasts.
Nintendo predicts annual sales through March 2011 will fall 2.4 percent to $15 billion and earnings will fall 12.5 percent to $2.2 billion, said the AP. While sales of the Wii face stiff competition from Sony and Microsoft consoles, Nintendo’s handhelds have also come up against competition from smartphones. There are over 25,000 gaming apps for the iPhone/iPod touch, according to mobiclix and sales of the iPhone/iPod touch are expected to reach 100 million by next summer.
Nintendo said annual sales of its current DS portables including the DSi XL reached 12.3 million for the Americas—a record for the region. Nintendo said Wii sales softened in the first part of the fiscal year due to the recession but rebounded later during Christmas, said the AP. Nintendo dropped the price of the Wii by about $50 to $200 before Christmas.
Nintendo expects to sell 300 million DS products and 18 million Wii consoles in the current fiscal year (ending March 2011).
Sources: AP via Yahoo and Bloomberg via BusinessWeek
Photo: Satoru Iwata, Nintendo’s president via techgage
Nintendo: Profits Stumble; Pins Hopes on 3DS
By Amy Gilroy
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