Japanese video game and console maker Nintendo Co. reports fiscal first quarter earnings on Thursday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: Nintendo has weathered the global recession in relatively good shape, and as President Satoru Iwata often says, his company is more resilient than most during economic downturns.
Still, the Kyoto-based maker of Pokemon and Super Mario games is feeling the squeeze from slumping consumer demand and intensifying competition from rivals Sony Corp. and Microsoft Corp. Sales of the Wii game console and DS handheld device are down sharply from last year.
In June sales of game hardware, software and accessories plunged 31 percent from the same month last year to $1.17 billion, according to market researcher NPD Group. It was the largest year-over-year decline the industry has seen in nearly nine years.
Nintendo also faces concerns about competition after last month’s Electronic Entertainment Expo, where both Sony and Microsoft unveiled prototype motion-control devices for the Xbox 360 and PlayStation 3. Nintendo’s Wii was the first console to employ a motion-detecting controller when it debuted in 2006.
Nintendo showcased the Wii MotionPlus, an attachment that uses sensors to more precisely mimic gamers’ hand movements on screen. The only new apparatus it debuted this year was the Wii Vitality Sensor, which can check a player’s pulse. That prompted some to wonder if Nintendo had run out of ideas.
BY THE NUMBERS: Nintendo continues to be bullish about the future, forecasting a 7.5 percent rise in net profit to 300 billion yen for the fiscal year through March 2010. But it expects sales to edge down 2.1 percent to 1.8 trillion yen, and operating profit to drop 11.8 percent to 490 billion yen.
Analysts surveyed by Thomson Reuters, on average, expect fiscal year profit of 317.9 billion yen.
Nintendo expects…