Pokemon Go boost limited as Nintendo cuts profit forecast
tokyo — Japanese video game maker Nintendo Co has slashed its operating profit and sales forecasts for this fiscal year, despite the global success of “Pokemon Go.”
The Kyoto-based maker of Super Mario games and the Wii U console said on Wednesday that it booked a ¥62.7 billion ($601.7 million) gain in AprilSeptember from its sale of the Seattle Mariners Major League Baseball team.
That helped push its net profit in the half-year to ¥38.3 billion ($368 million), up 234 per cent from the same period the year before. Nintendo said it expects its net profit for the year that ends March 31, 2017, to overshoot its earlier estimate thanks to that gain.
Nintendo’s earnings have suffered from lagging sales of its game consoles, including the Wii U and the 3DS handheld. The plunge in Nintendo’s net sales to $1.3 billion in april-september period company booked an operating loss of ¥5.95 billion ($57.1 million) in April-September, compared with an operating profit of about ¥9 billion a year earlier. It cut its full-year operating profit forecast to ¥30 billion ($288 million) from ¥45 billion.
Nintendo’s net sales sank 33 per cent to ¥136.8 billion ($1.3 billion) in April-September. It cut its sales forecast for the full year by six per cent to ¥470 billion.
After years of scoffing at the threat from smartphones, Nintendo did an about face last year and entered that sector. Pokemon Go is definitely its first success since making that decision, and it underlines Nintendo’s potential. The game, which has players looking for Pokemon creatures in their real-life wanderings, is a good match for the classic Pokemon story.
But Nintendo has warned the “Pokemon Go” perk will be limited. The Pokemon Co, a Nintendo affiliate, gets licensing fees and other compensation for the mobile game distributed by Niantic Inc, but that is having a limited impact on its income.
The “Pokemon Go” game became available after the first quarter ended, and playing it basically is all free. The company may get a boost from sales of other Nintendo products. — AP