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Finance

Nintendo to post recurring losses of 100 billion - report

Wed 26 Oct 2011 9:55am GMT / 5:55am EDT / 2:55am PDT
FinancePublishing

Shares fall 7 per cent following Nikkei earnings report

Nintendo's recurring losses for the first half of the financial year could be double what the company forecasted, Reuters reports.

The Japanese business daily Nikkei expects Nintendo to post a recurring loss of 100 billion ($1.32 billion/823.5 million) when it publishes its financial results tomorrow - significantly higher than the 55 billion predicted in its guidance.

Nikkei acknowledged the strength of the Yen as an important factor, estimating that Nintendo - which makes 80 per cent of sales outside of Japan - suffered 40 billion in foreign exchange losses in the six month period ending September 30.

Following the report, Nintendo's shares fell by 7.5 per cent to 10,800 ($142.3/88.94).

For a full breakdown of Nintendo's recent stock performance, read Rob Fahey's Stock Ticker article.

7 Comments

Jim Webb
Executive Editor/Community Director

2,210 2,049 0.9
So this includes Q1 which already posted a $324 million loss. That leaves $1 billion left for Q2. If $528 million is lost due to exchange rates as Nikkei suggests, that's about $470 million in real losses for Q2.

Wii U R&D is my only guess. They take some loss on the 3DS but not enough to do that. And they usually do around $400 million per year in R&D during a regular year which I can imagine spikes pretty high leading up to a console launch.

Posted:2 years ago

#1

Rick Lopez
Illustrator, Graphic Designer

1,203 816 0.7
I honestly feel the 3ds was launched and executed poorly. It really plays and feels like a normal DS, in terms of graphics, capabilities and feel, but just with 3D. I see parents telling there kids to buy a normal DS because the find the 3D feature useless. in terms of specs and performance it really isnt all that much differant. I thing nintendo just became arrogant. The were riding on the success of the Wii and DS brands that they forgot how to make games. Cause honestly each new console brings updated versions of the same games. No new IP or new software. I love Mario Kart, I am excited about Mario Kart 7... but at the end of the day, its just another mario kart. I hope the Wii U will remain technologically and creativly competitive with PS4 and XboxNext consoles and games.

Posted:2 years ago

#2
exchange rate plus R and D seem to be the main culprit

Posted:2 years ago

#3

Anders Pedersen
Studying Management of Creative Business Processes

2 0 0.0
Isnt exchange rate more like a "lower profit margin"...they could have earned more if the yen were not so strong...but blaming a poor financial statment on it is at best "so so"...real problem I think is, decreasing sales due to the global financial recession...but isnt that pretty much what you could expect

Posted:2 years ago

#4

Anders Pedersen
Studying Management of Creative Business Processes

2 0 0.0
...claming that they dont have new IPs isnt justified in my opinion. A 3rd of all games are still published by nintendo...as far as I know

Posted:2 years ago

#5

Jim Webb
Executive Editor/Community Director

2,210 2,049 0.9
Anders. Reduced sales doesn't create a loss. That would just be reduced revenue. So long as revenue doesn't drop below operation needs, profit is still achieved. And Nintendo has low operational costs with a workforce of just 4,800.

The exchange rate can have a direct impact on profit. For example, if you normally make $2 profit something but the exchange rate drops the value by $5 dollar, you are now taking a $3 loss on each sale.

Posted:2 years ago

#6

Tony Johns

520 12 0.0
The share market is in no relation to the sales of 3DS and the upcomming WiiU.

It has been a bad year for investores and the economy, with the Japanese Earthquake/Tsunami/Neuclear disasters affecting the Japanese market as well as the poor US dollar and the drama over the Euro market, I think there are other factores at play when it comes to the Nintendo's share market troubles regardless of what Nintendo do themselves.

Hiroshi Yamaguchi must have thought he should have cashed in his shares back in 2007 when his company was so high with the success after the Wii and the DS were dominating the market.

Posted:2 years ago

#7

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