Big Mike
07-29-2005, 08:06 AM
Nintendo Sees Profits Fall Sharply
Low-margin hardware and heavy research leave the company waiting for Link's return.
by David Adams
July 28, 2005 - Nintendo announced its first-quarter earnings on Thursday, showing a 78.5% decline in operating profit compared to last year. The company cites low margins on its hardware as well as higher development costs as the primary reasons for the slump.
For Nintendo's April through June quarter, the company saw operating profit of 3.75 billion yen ($33.35 million), down from 17.47 billion yen in the same period last year. The company reports net profit of 14.12 billion yen ($125.6 million) compared to last year's net profit of 22.64 billion yen.
While the Nintendo DS has sold well -- the company reports 1.38 million in the first quarter -- Nintendo sees little profit margin on hardware compared to software titles. The company's next big software hit will almost certainly be the new Legend of Zelda title, expected to reach stores this holiday season.
The sales strength of the Nintendo DS contrasts with falling Game Boy Advance sales: the older hardware saw 980,000 units sold in the first quarter, compared to 2.32 million in the same period last year. Similarly, GameCube sales dropped to 260,000 units, compared to 650,000 in last year's first quarter.
With Zelda in mind, Nintendo still expects its full-year operating profit to rise to 115 billion yen, or 3.1% above last year.
this is cuz afta the psp came out people traded in those piece of sh*t ds's and bought psp. now psp is gonna kick a$$ when games like gta and dj come out.
Low-margin hardware and heavy research leave the company waiting for Link's return.
by David Adams
July 28, 2005 - Nintendo announced its first-quarter earnings on Thursday, showing a 78.5% decline in operating profit compared to last year. The company cites low margins on its hardware as well as higher development costs as the primary reasons for the slump.
For Nintendo's April through June quarter, the company saw operating profit of 3.75 billion yen ($33.35 million), down from 17.47 billion yen in the same period last year. The company reports net profit of 14.12 billion yen ($125.6 million) compared to last year's net profit of 22.64 billion yen.
While the Nintendo DS has sold well -- the company reports 1.38 million in the first quarter -- Nintendo sees little profit margin on hardware compared to software titles. The company's next big software hit will almost certainly be the new Legend of Zelda title, expected to reach stores this holiday season.
The sales strength of the Nintendo DS contrasts with falling Game Boy Advance sales: the older hardware saw 980,000 units sold in the first quarter, compared to 2.32 million in the same period last year. Similarly, GameCube sales dropped to 260,000 units, compared to 650,000 in last year's first quarter.
With Zelda in mind, Nintendo still expects its full-year operating profit to rise to 115 billion yen, or 3.1% above last year.
this is cuz afta the psp came out people traded in those piece of sh*t ds's and bought psp. now psp is gonna kick a$$ when games like gta and dj come out.