Nintendo doubles first-half profit projection

Fluctuations on the international currency markets have given Nintendo's profits for the first half of its fiscal year a major boost, with the weakening Yen almost doubling profit expectations despite a drop in sales.

The firm now expects to report a profit of 46 billion Yen (338 million Euro) on sales of 185 billion Yen (1.36 billion Euro), compared with its previous expectations - forecast in May - of a 25 billion Yen (184 million Euro) profit on sales of 200 billion Yen (1.47 billion Euro).

The company also raised its full year profit estimate by 20 per cent to 84 billion Yen (617 million Euro), although its sales estimate for the full year remains unchanged at 530 billion Yen (3.9 billion Euro), with the shortfall in the first half presumably being compensated for by stronger projections for the second half, including a bullish outlook on the Nintendo DS handheld.

The increased profit figures are largely attributed to the growing strength of the US dollar against the Yen, which has increased the value of both Nintendo's overseas assets and its North American sales. A similar, although less significant, boost has been seen from the movement of the Euro against the Yen.

Shares in Nintendo actually fell by 2.2 per cent on the news, as the markets reacted to the firm's admission that it will miss its sales target for the fiscal first half, which runs from April through to September. However, the company's stock has seen a mainly upward trend in recent weeks as investors warm to the Nintendo DS handheld, with Nintendo's newfound aggressive approach to the market being largely lauded by analysts both in Japan and abroad.