Nintendo income forecast falls short as it seeks another hit

[TOKYO] Nintendo Co forecast full-year profit short of analysts' estimates, casting doubt on the gaming company's ability to deliver a new hit product to follow dwindling Wii U console sales.

Net income will probably climb to 35 billion yen (S$424.8 million) on revenue of 500 billion yen in the year ending March 2017, the Kyoto, Japan-based company said in a statement Wednesday. While that's more than double the previous period, the forecast is below analysts' projection for 44.1 billion yen, according to the average of estimates compiled by Bloomberg. The shares of Nintendo fell 6.1 per cent in German trading following the announcement.

Nintendo predicted that Wii U sales will fall to 800,000 units from 3.26 million, while those of 3DS will decline to 5 million from 6.79 million. Tatsumi Kimishima, Nintendo's chief executive officer, said two new smartphone games - Fire Emblem and Animal Crossing - will help bolster profit this year. Nintendo said Wednesday that the NX, the company's next gaming platform, will debut in March of next year.

Revenue fell 8 per cent to 504.5 billion yen for the year that ended in March. Net income for the latest fiscal year was 16.5 billion yen, compared with 41.8 billion yen a year earlier.

Nintendo shares jumped 33 per cent in 2015 after the company said it planned to develop titles for iPhones and other mobile devices. Miitomo lets users automatically generate a cartoon- like avatar using a photo taken on the smartphone, and tweak minute facial features, set personality parameters and choose the character's voice.

Still, Nintendo was criticized last year when it said the app would be free-to-play, and didn't include characters from its popular Mario and Zelda gaming franchises.

More than 10 million Miitomo users have registered since the app's March release, the company said on Wednesday. It also topped US and Japan rankings for free-to-play iOS apps, according to market researcher App Annie. SurveyMonkey Intelligence estimated the messaging-based app is making US$280,000 a week.

Nintendo teamed with DeNA Co, operator of the Mobage network, to create mobile games and operate new membership services that will eventually - though not immediately - include applications based on Nintendo's character lineup of plumbers, gorillas and princesses. Mr Kimishima has said the next game will dip into its stable of beloved characters.

BLOOMBERG