Nintendo profit slumps

File photo: Toru Hanai, Reuters

File photo: Toru Hanai, Reuters

Published Feb 2, 2016

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Tokyo - Nintendo reported a 36 percent fall in third-quarter profit after a lack of hit game titles hurt holiday sales of its Wii U and 3DS hardware.

Net income was 29.1 billion yen ($241 million) in the three months to December, the Kyoto-based company reported Tuesday. That compares with the 23 billion yen average of four analyst estimates compiled by Bloomberg. Nintendo reported a 45.2 billion yen profit a year earlier, when a currency windfall boosted earnings.

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Nintendo relies on software titles to drive demand for machines such as the 3DS handheld player and Wii U. The result comes as the company faces its biggest shakeup since the 1970s, with its debut smartphone game Miitomo to be released next month while work is under way on a new console code-named NX.

“There were simply no hit titles on Wii U and 3DS at the year-end shopping season,” Tomoaki Kawasaki, an analyst at Iwai Cosmo Securities, said prior to the earnings announcement.

“There is a lot of attention on Miitomo in March and what it will say about the company’s strategy. Nintendo absolutely needs a new growth driver.”

Nintendo shares rose 33 percent last year, fuelled by its March announcement that the company was entering the smartphone game market and planned to develop titles for mobile devices made by other companies. The stock has gained 2.5 percent this year.

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The company maintained its full-year forecasts for operating profit of 50 billion yen on sales of 570 billion yen.

BLOOMBERG

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