Nintendo faces challenging 2011

28 January 2011

TOKYO: Nintendo has announced worse-than-expected profits of ¥49.6bn ($599m, €436m) for April-December 2010, with sales of both the Wii and DS falling markedly.

According to the financial results, 13.7m Wiis were sold worldwide over the nine-month period, 20% down on April-December 2009.

DS faced a still sharper fall, off 33% at 15.7m. Overall net profits were 74% down.

The video games firm's plans for 2011 include the worldwide launch of the 3DS, a 3D version of its handheld console, which will be released in Japan on February 26th.

Speaking to Bloomberg, Tokai Tokyo Securities analyst Yusuke Tsunoda said: "The results today are much worse than expected, casting doubts on the company's full-year outlook ... This puts even more pressure on Nintendo to make the 3DS debut a success."

Nintendo faces significant long-term challenges in the handheld games sector, with rivals Sony announcing this week that it will launch a new, 3G-enabled version of its PSP device by the end of the year.

Both Japanese games specialists are also being squeezed by the strong yen and the rise of smartphone-based gaming.

A Gartner report released this week showed that worldwide app downloads will rise by 117% this year.

Paid-for apps, many of them games such as Angry Birds or Flight Control, will take up 19% of the download total - a record high.

Data sourced from Bloomberg/AFP/Warc; additional content by Warc staff