Nintendo to post recurring losses of ¥100 billion - report
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.
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.
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.
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.