Nintendo highlighted the success of its games strategy by increasing first quarter profits nearly eightfold and raising its full-year profit forecast by 28 per cent.
Strong demand for the DS handheld games console helped first-quarter operating profits surge to Y28.8bn from Y3.75bn, and Nintendo revised its full-year net profit forecast to Y83bn from Y65bn.
The improved results vindicate Nintendo’s strategy with its DS portable games, which have been a huge hit not only among young players but also groups that traditionally have shunned video games, such as senior citizens and young women.
Nintendo has expanded its customer base with new titles, such as “Brain Training for Adults”, which has been popular in Japan’s ageing society, due to growing concerns among the Japanese public about senility. It has been claimed that playing such games helps to maintain mental agility.
One popular game is a cooking programme, which has helped to increase the number of women who are not traditional supporters of the games industry.
The long-running hit game “Super Mario” also helped sales of the latest version of DS products.
Nintendo’s success is based on developing games that are “easy but fun”, said Hiroshi Kamide, an analyst at KBC in Tokyo. “It’s very hard to develop something that…appeals to non-users as well as users but they have pulled it off.”
In contrast to its rivals, which aim to raise console prices by including technically advanced features, Nintendo has managed to keep its consoles priced reasonably low while continuing to develop new features such as the dual screen for the DS.
The Kyoto-based group has consistently opposed raising the technological hurdle for games, a trend which it says is alienating non-core and new users.
Nintendo will build on its plans for its next generation console, the Wii, which it aims to sell for $250 or less in the US. That is half the price of Sony’s next generation games console, the PlayStation 3, although the PS3 will also function as a Blu-ray DVD player.
Nintendo is marketing the Wii as “the most inviting, inclusive video game system to date”, which will allow anyone to enjoy games regardless of their age or skill.
The group’s revised full-year forecast calls for a 26 per cent rise in sales to Y640bn. Operating profits are forecast to be Y125bn, 39 per cent higher than last year.
However, pre-tax profits will be nearly 10 per cent lower than last year at Y145bn and net profits will be 16 per cent lower at Y83bn, based on forecasts of a stronger yen against the dollar.
