Japan’s Nintendo Co. expects annual profit to more than double this year to above market forecasts on strong sales of the DS and game software, sending shares up 2.4 percent.
Nintendo raised its operating profit estimate by 28 percent to a record of 185 billion yen ($1.6 billion) for the year to March 31, from a previous forecast of 145 billion yen. It posted a 90.3 billion yen profit last business year.
These sales figures are contasting the problems that Tokyo-based Sony were facing, as last year they cut shipment targets for the PSP and delayed the PS3 launch. Sony expects a loss of 200 billion yen at its game unit this business year.
The earnings upgrade “underlines the strength of the DS and that the Wii is off to a flying start” said Hiroshi Kamide, an analyst at KBC Securities.
Previously, analysts had feared that the DS and Wii, both of which were easy-to-play systems, could end up taking customers from each other, hurting the company’s overall sales (which has been proven wrong by now).
But Nintendo President Satoru Iwata said the outcome has turned out otherwise.
“One of the reasons for the large upward revision is because DS sales were steady even after the launch of Wii,” Iwata said during a news conference in Osaka.
“Also, demand typically shrinks after the Christmas season, but this year, we don’t see demand slowing down,” Iwata said.
Nintendo also lifted its revenue forecast by 22 percent to 900 billion yen from an earlier target of 740 billion yen. That compares with sales of 509.2 billion yen the previous year.
“At this rate they are going to be a 1 trillion yen sales company next year, which is pretty amazing,” Kamide said.
The company, known for its Mario and Pokemon game characters, also raised its annual dividend forecast to 480 yen from an earlier estimate of 400 yen.
Kyoto-based Nintendo raised its sales target for the DS game player by 15 percent to 23 million units in the year to March. It also expects DS software sales to reach 100 million units, up from an earlier target of 82 million.
Not to mention that the Wii debut were well received in both North America and UK