Nintendo, the world's largest maker of video-game machines, cut its full-year profit forecast more than analysts had estimated because of weaker demand for its 3DS handheld player and a strong yen.
Net income may be 6 billion yen (€57.9 million) for the year ending March 31, compared with Nintendo's previous estimate of a 20 billion yen profit, the Japan-based company said in a statement today.
Nintendo cut its sales forecast for the 3DS game players 5.4 per cent to 17.5 million units and lowered its estimate for software sales amid weakening demand.
Nintendo, Sony and Microsoft, the world's three biggest video-game console makers, face increasing competition from smartphones and tablets including Apple's iPhone and iPad, which are capable of downloading and playing games, some for free.
"Consumers are content to use their smartphones and tablet computers to play games," said Makoto Kikuchi, chief executive officer at Myojo Asset Management Japan, a Tokyo-based hedge fund advisory firm. "The 3DS is really failing."
The console maker, which got 72 per cent of its revenue from the Americas and Europe last fiscal year, booked a 23 billion-yen exchange-rate loss in this fiscal year's first half after the Japanese currency was stronger against the dollar and euro than Nintendo projected.
The company cut its software sales target for the 3DS to 70 million units from 73 million.
Nintendo fell 1.7 per cent to close at 10,290 yen in Osaka trading before the announcement, extending its decline this year to 2.9 per cent.
The company posted a 43.2 billion-yen loss last fiscal year, its first since going public in 1962, as it cut the price of the 3DS amid slow demand.
Nintendo's net loss for the fiscal first half ended September 30 narrowed to 28 billion yen from a 70.3 billion-yen loss a year earlier, the company said today.
Bloomberg
