Nintendo surprises with big earnings rise

29 Oct 2014 | Author: | No comments yet »

Nintendo Just Turned Profitable and Wii U Sales Are Past 7 Million.

TOKYO — Nintendo posted second-quarter profit that beat analyst estimates, helped by a weaker yen that boosted the value of overseas sales and demand for new games including Super Smash Bros. and Mario Kart 8.Surprise, Nintendo just made a pile of unexpected money: 14.3 billion yen in net income, or about $132 million, for the six month fiscal period that ended in September.Nintendo’s rocky year might be finally be at an end, with the company beating market expectations to post a an operating profit of 215m yen ($2m or £1.2m) in the quarter ending September.

Net income was 24.2 billion yen ($224 million) in the three months ended Sept. 30, compared with a loss of 8 billion yen a year earlier, according to figures derived from first-half results the Kyoto, Japan-based company reported Wednesday. Sales of software for the Wii U jumped 49 percent to 9.4 million units in the first half, helped by the release of Mario Kart 8 title in May, Nintendo said. And in the last three months, July to September, the company’s had unexpected quarterly operating profits as well, reaching 9.3 billion yen, or about $86 million, reports Reuters, which adds that the weaker yen boosted overseas earnings. Photographer: Michael Nagle/Bloomberg Nintendo Co. (7974) is counting on new games to boost sales of its Wii U and the latest results suggest that strategy is breathing life back into the console.

This doesn’t compare too favourably to Sony’s PS4 which broke sales of 10 million units worldwide in August this year after launching last November. (The PS4 is easily winning the latest battle of the consoles, with Microsoft’s Xbox One sales estimated to be languishing around the 5 million mark.) Nintendo also has to look to the success of its handheld console the 3DS. Nintendo’s new video game Hyrule Warriors is gaining popularity with global audiences who are getting a second chance to play with legendary characters Zelda, Link and Lana from the Zelda series. Nintendo said it logged 15.5 billion yen ($143 million) in exchange gains due to the depreciation of the yen, which was greater in recent months than it was last year.

The only downer for Nintendo here is 3DS hardware sales, which dropped from 3.89 million units April-September 2013 to 2.09 million units for the same period this year. By next year, the company plans to introduce several new titles including Splatoon, which lets two teams take on roles as squids that morph into people and shoot different-colored ink in timed matches. The company is also entering the multibillion-dollar, collectible-toy market with its Amiibo figurines, which are similar to Activision Blizzard Inc.’s Skylanders. The game was released for 3DS on Oct. 3 in North America and Europe as Nintendo adapted it for portable play after success on the earlier Wii console. “Smash Bros. is actually a game for consoles” rather than handheld systems, Eiji Maeda, a Tokyo-based analyst at SMBC Nikko Securities, said before the earnings release.

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