The global recession doesn’t seem to have slowed Nintendo’s momentum much. On May 7, Nintendo reported a 14 percent gain in operating profits, to $5.6 billion, for the fiscal year through March, and a 10 percent rise in sales, to $18.6 billion. Both figures shattered the previous year’s all-time highs and were in line with what analysts had expected for the Japanese video game maker.
Nintendo has been a bright spot in an otherwise dismal Japanese tech sector. Its Wii living-room console and newly released portable DSi have been a big draw for both nongamers and hard-core gamers. In the past year the company has racked up a return on equity of around 22 percent and operating-profit margins of 29 percent — well ahead of other Japanese tech and video game makers, analysts figure.
But the company’s latest record-breaking figures could be its last for a while. In fact, Nintendo’s own not-so-optimistic forecasts have analysts and investors wondering whether the company is helpless to keep its streak from ending. For the fiscal year ending next March, Nintendo expects a 12 percent pullback in operating profit — its first in four years — and a 2.1 percent slide in revenues. That’s not bad given how the sudden slowdown has slammed other sectors. Still, the skepticism partly explains the drop in the value of Nintendo’s stock by half since last June, and its 21 percent fall since early January. [The benchmark Nikkei average has rebounded 6 percent so far this year.] Following the announcement, the company’s shares fell 0.1 percent, compared to the Nikkei’s 4.6 percent rise.
Trouble at Home
The bearish investor sentiment is putting more pressure on Nintendo President Satoru Iwata to come up with more hit games or services. In Europe and the U.S., the company has continued to rack up big gains….