James Delahunty
8 Oct 2005 19:08
Profits are reportedly down at one of the world's biggest gaming company's, Nintendo, due to fierce competition and shrinking demand for Nintendo products. Demand for the GameCube console in the United States are way down and sales of the GameBoy Advance handheld console weakened in both Japan and North America. This has sent shares down 14% to 70.6bn yen ($62m) in the three months to June. Pre-tax income was down 41% to 21.3bn yen.
Nintendo's next project, the next generation Revolution console will be unveiled next year which the company hopes will drive profits up. Increased research spending into the Revolution console affected profits in the most recent quarter. When the Revolution console appears, it will be faced with huge competition from Microsoft's Xbox 360 and Sony's PlayStation 3.
The company had warned earlier this year that profits would be affected by competition from Microsoft and Sony. 1.38 million DS consoles were sold since launch but Nintendo had to cut prices in the US and in Europe due to competition. Recently launched games like Pokemon Emerald and Nintendogs performed strongly, the company said, but admitted the drop in sales of GameCube devices. Nintendo has reduced its forecast for full year sales to 500bn yen, a drop of 5%.
Source:
BBC News