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Dollar disaster batters Nintendo profits

Nintendo becomes the second Japanese heavyweight in as many days to wind down profit forecasts, as a big dip in the value of the US dollar makes its presence felt.

A virtual crash in the value of the US dollar has wrecked Nintendo's profits for the fiscal year ending March 31, 2004, the company confirmed this week.

Despite strong sales of Game Boy produce and a global user base for GameCube of 15 million units, actually in excess of that of Xbox, the company has revealed a 47 percent drop in year-on-year profits.

Nintendo made around 50 billion yen (â'¬394 million) for the year before tax, almost half the predicted figure. Unstirred by the disastrous (cough) news, the company raised expectations for the fiscal year ending March 31, 2005 to a monster 110 billion yen (â'¬868 million).

In fact, while net profit at the company was hit severely by the plummetting yen value of its dollar investments, Nintendo's underlying figures were even healthier than last years - with sales rising to 510 billion yen (â'¬4.02 billion) from 504 billion yen (â'¬3.8 billion), while operating profits climbed to 105 billion yen (â'¬828m) from 100 billion (â'¬790m).

The yen's value against the dollar has risen by almost 13 per cent in the past year, and has risen 7.3 per cent since the company's financial projections were made - sending the value of its US assets plummetting, when measured in yen terms.

Nintendo, which holds assets worth aroundUS$6 billion (â'¬4.95 billion) in European and American accounts, issued a statement earlier this week blaming the state of the currency markets for the drop in banked coinage for the year.

Only â'¬394 million, eh? Hard times.

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