Nintendo consoles itself with Wii success

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Last Updated: 31 Aug 2010

That’s certainly true for Nintendo, which said today that sales of its all-conquering Wii console helped it to boost profits by a whopping 34% last quarter – at a time when most big corporates are feeling the squeeze. Net profit rose to just under $1bn during the three months to June, as Nintendo continued to put the pressure on video game console rivals Microsoft and Sony.

The star of the show was undoubtedly its innovative Wii console, which is currently taking the world by storm – it managed to shift another 5.2m machines during the quarter, taking its total sales to just under 30m. Clearly the motion-sensitive control system is a big part of this success – the latest Mario Kart game, complete with a wireless steering wheel, sold 6.4m copies in the quarter.

But Nintendo’s other big achievement has been to open up a huge new audience for its titles. Its Wii Fit game, which comes with a balance board and has been specifically targeted at women and older people (you try finding a typical young adult male gamer in the adverts), is also selling like hot cakes – 3.4m flew off the shelves last quarter. In fact, Nintendo’s biggest problem has been keeping up with demand.

All of this has done wonders for Nintendo’s share price (which has doubled since the Wii’s launch) and given it a major boost in its battle with its big rivals. Sony, which reported a 50% plunge in profits yesterday, is certainly struggling to keep up: it’s sold less than half as many PS3 consoles.

Nintendo’s biggest problem now will be trying to live up to greater expectations – its shares have dropped by a sixth this year as investors fret about the speed of its growth. And today’s refusal to adjust its annual earnings forecast upwards – it’s currently predicting full-year profits of just under $5bn, lower than analysts’ expectations – won’t exactly help.

Still – given that it wasn’t too long ago that Nintendo was really struggling for a foothold in the video games market, we suspect this is probably what they call ‘a high quality problem’...


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Nintendo consoles itself with Wii success
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