Nintendo’s hottest game in years is saving the company

29 Jul 2015 | Author: | No comments yet »

Ink-shooting game ‘Splatoon’ helps power Nintendo to profit.

Nintendo returned a profit over its April to June quarter in part thanks to a super-popular shoot-em-up online game in which players squirt ink to claim rivals’ territory. May to June are not the months in which a video game company’s fortunes are won or lost but it’s still good news for Nintendo anyway, as they managed to do better than most market analysts thought they would.It’s earnings day at Nintendo, and the Japanese company surprised watchers by eking out a unexpected, and albeit meagre, $8.9 million profit for its most recent quarter of business.

Nintendo Co. returned to profit helped by sales of the new Splatoon game and the weaker yen in the last quarterly results overseen by President Satoru Iwata before his death. The Japanese game company announced a net income of 8.3 billion yen ($67 million) for the three months leading up to June 30, a turnaround from a loss of 9.9 billion yen year-over-year. Nintendo sold less than half a million Wii U consoles these past three months, but, nevertheless, that was enough to push the near-three-year-old device’s total sales to date past the 10 million mark. Sony notched that very figure for the PlayStation 4 in just nine months, which shows the gulf between Nintendo, a beloved company among the gaming community, and the leaders in the consumer console space. Other factors that buoyed the company’s business were the weakness of the yen and strong sales of Amiibo, which are figurines that are designed to wirelessly communicate with the Wii U and 3DS, triggering in-game benefits.

The paint-shooting game Splatoon and a weaker yen enabled Nintendo to report a small profit, just after 55-year-old Iwata died from cancer on July 11. Nintendo, which earlier this struck an historic agreement with DeNA to produce mobile games, is sticking to its guns and its original $400 million profit forecast for this financial year.

Given the modest start from this quarter and that fact that its mobile games aren’t likely to drop until sometime in 2016, it’s hard to see the company realizing its projection with nothing major in the new release pipeline. The European currency traded at 136.48 yen and the greenback at 123.66 yen on Wednesday, compared with Nintendo’s annual estimate of 125 yen and 120 yen, respectively.

There was no mention of the Wii U’s eventual replacement, currently codenamed NX, but the company did briefly refer to its mobile plans, which are due to start later this year. ‘We expect to secure a new source of revenue from a gaming application for smart devices, which will be released by the end of this calendar year,’ read the statement. Iwata’s death came only a few months after he announced a tie-up to bring Nintendo characters to smartphone games with mobile gaming giant DeNA, ending years of resistance to phones. They have gained 46 percent since March 17, when the company announced the partnership with DeNA, which also will operate membership services that include applications based on Nintendo’s characters. Especially now that they’re finally ready to release the standalone amiibo reader for the non-New 3DS family of consoles, with the peripheral due to launch alongside Animal Crossing: Happy Home Designer on October 2. Nintendo resisted turning to smartphones for years, saying its games were designed for its own machines, where players can use a joystick and physical buttons to move through the virtual world. “Everyone seems to be pricing in a smartphone success story for Nintendo,” Eiji Maeda, an analyst at SMBC Nikko Securities Inc., said before the earnings release.

With Iwata gone, the responsibility for the larger comeback lies with Super Mario creator Shigeru Miyamoto and hardware architect Genyo Takeda, who are sharing management responsibility in Iwata’s absence. Part of that strategy includes the launch of the NX game console next year, as well as mobile games being developed in partnership with Japan’s DeNA.

Nintendo resisted putting its games on smart devices for years, but it finally admitted defeat on that front in March when it announced the DeNA partnership. Nintendo announced a partnership with Universal Parks & Resorts to offer theme-park attractions based on the Japanese company’s intellectual property.

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