TOKYO—Nintendo Co. President Satoru Iwata has pledged that the “Super Mario” game creator will post a 100 billion-yen ($1 billion U.S.) operating profit this fiscal year as new software titles boost sales. Analysts say he’ll fail.
Iwata will announce a second straight annual loss tomorrow, losing 18.7 billion yen in the 12 months ended March 31, according to the average of 15 estimates compiled by Bloomberg. For the year started April 1, Nintendo may post operating income of 70 billion-yen, according to the average of 19 estimates—short of a target he said was a personal “commitment.”
Nintendo’s Wii U, its first new home-gaming console since 2006, is failing to meet sales targets amid a delay to software releases that Iwata said were crucial to winning over consumers who increasingly play games on smartphones and tablet computers. Sony Corp. and Microsoft Corp. are also preparing to release upgraded consoles this year, adding pressure on the 53-year-old executive who has been in the role since 2002.
“Iwata hasn’t produced good results in recent years,” said Hideki Yasuda, a Tokyo-based analyst at Ace Securities Co. in Tokyo. “He can’t avoid being criticized.”
Yasuhiro Minagawa, a spokesman for Kyoto-based Nintendo, declined to comment on the difference between its commitment and analysts’ forecasts. The company will release earnings after the close of trading Tuesday.
Nintendo rose 0.8 per cent to 11,630 yen yesterday and has gained 27 per cent this year, compared with a 31 per cent surge in Japan’s benchmark Nikkei 225 Stock Average. Sony has jumped 71 per cent.
To help win back gamers from mobile devices, the company last year released the Wii U that combines TV screen action with a touch-screen controller in the company’s first new console since the original Wii was released in 2006.
To avoid repeating the mistake Nintendo made with its 3DS handheld player, which had its price cut within six months of a 2011 debut on a lack of software, Iwata promised to keep the pipeline of games for the Wii U strong.
Preparing software would drive demand for hardware such as the Wii U, Iwata said in June before the machine’s debut.
He couldn’t maintain it as Nintendo halted new software for the Wii U at the start of this year because of development delays, Iwata said Jan. 31.
In Japan, the release of Pikmin 3 in Japan is delayed to July from this spring, according to the company’s announcements. Game & Wario was pushed back to March 28 from the beginning of the year.
“He has been one step behind in some strategic points,” said Eiji Maeda, an analyst at SMBC Nikko Securities Inc. “Contents are important to increase game fans. But Nintendo couldn’t provide game titles.”
The company may have sold 3.5 million Wii Us last financial year, missing its target of 4 million, Takeshi Koyama, a Tokyo- based analyst at Mizuho Financial Group Inc., said in a report April 16. The company may sell 9 million units this fiscal year, he said.
Nintendo also faces tougher competition for game players from rival console makers in a market that is shrinking amid the shift to mobile devices.
Sony said in February it will release a Playstation 4 before the year-end holiday season, its first upgrade in seven years. Microsoft may unveil the successor to its Xbox 360 at the gaming industry’s E3 expo in June or a separate event in May, three people familiar with the plans said this month.
U.S. retail sales of video-game hardware, software and accessories fell 10 per cent to $992.5 million (U.S.) last month, according to researcher NPD Group Inc. Hardware sales fell the most, declining 32 per cent compared with a year ago, Port Washington, New York-based NPD said in April 18 e-mailed statement.
While Nintendo struggles with its main business, a weakening of the yen may give some relief, as it boosts the value of overseas earnings. The Japanese currency has depreciated about 13 per cent against the U.S. dollar this year and touched a four-year low of 99.95 on April 11.
if Nintendo doesnt wow people at E3 then their d00med.
http://www.thestar.c...ii_u_flops.html
