Nintendo announces profits rise, but drops full-year projections

Lowered sales expectations for GameCube hardware and DS software have caused Nintendo to drop its full year financial projections, despite strong income figures for the first nine months of the financial year.

Net income for the nine months ended December 31st increased by 97 per cent year on year to 67.8 billion Yen (503 million Euro) on revenues of 419 billion Yen (3.1 billion Euro), with the vastly increased profitability coming despite a small 4.6 per cent decline in sales.

The launch of the Nintendo DS proved a major success for the company, with over 2.8 million units sold in the period, while GBA titles Pokemon Fire Red and Leaf Green were also key performers, with 5.8 million units sold.

The company also noted strong sales for GameCube titles Mario Party 6 and Paper Mario: The Thousand Year Door, both of which sold over a million units during the reporting period.

However, the firm's projections for the full year, which runs through to the end of March, have been dropped due to currency market fluctuations and lowered expectations for the performance of GameCube hardware and Nintendo DS software.

The firm has dropped its net sales projection by 3.7 per cent to 520 billion Yen (3.9 billion Euro), while the net income projection has fallen by 22.2 per cent to 70 billion Yen (519 million Euro).

Although much of this change is down to movement in the currency exchange rates, which always has a huge impact on Nintendo due to its large overseas investments, the company also noted the slowing sales of Cube hardware and the fact that the backwards compatibility with GBA software has led to lower than expected sales of DS specific software titles.

Meanwhile, the company has also released its life to date shipment figures for the current hardware platforms, revealing that the Game Boy Advance shipped almost 66 million units by the end of 2004, while the Nintendo DS is off to a strong start with 2.84 million units shipped.

The GameCube also remains surprisingly strong, given the bad press which it seems to receive from most quarters, with over 18 million units of the diminutive console now shipped worldwide.

In software terms, the tie ratio for the Cube is particularly healthy, with over 148 million units of software shipped for the platform to date - a tie ratio of over eight to one. The Game Boy Advance has seen 256 million units of software shipped, a tie ratio of just under four to one, while over five million units of DS software are already on the market.