Nintendo Profits Drop a Staggering 74% Year-on-Year

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In an unfortunate case of terribly poor timing, Nintendo has revealed it’s had a rather significant dip in earnings over the past year. The Japanese console manufacturer and gaming giant has seen net profits dip 74% to just 49.6 billion yen ($599 million) for the nine months ended December 31, 2010.

Poor timing, purely because their announcement pretty much coincided with Sony’s mighty tasty NGP reveal.

“The results today are much worse than expected, casting doubts on the company’s full-year outlook,” said Tokai Tokyo Securities Co. analyst Yusuke Tsunoda. “This puts even more pressure on Nintendo to make the 3DS debut a success.”

I have no doubt the 3DS is gong to elevate their profits, particular if Japanese pre-orders are anything to go by. One thing Nintendo does have to realise is that they need to keep the “core” gamers happy as well as the casual market. Although their focus on casual has generated them a mountain of cash this generation, they’ll probably find that casual gamers’ love is fleeting, while the embrace of the core, if nurtured, is forever. The 3DS, awesome as it is, is a pricy piece of kit, and the uptake amongst casual gamers is unlikely to be as high as seen with the DS.

Sony realised this, and their NGP/PSP2 is a handheld love letter to their fans; it’s got all the features (and more importantly, games) that gamers have been asking for. Though the original PSP has failed to gain similar momentum to Nintendo’s DS, that might not be the case with the next generation of handhelds.

Source : Bloomberg

Last Updated: January 27, 2011

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