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Nintendo nine-month profit soars on baseball sale

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Nintendo said Tuesday its nine-month net profit soared after it sold a major stake in a US baseball team, while a falling yen lifted its annual forecasts.

[TOKYO] Nintendo said Tuesday its nine-month net profit soared after it sold a major stake in a US baseball team, while a falling yen lifted its annual forecasts.

But the Kyoto-based video game giant still reported declining overall sales and operating profit for the three quarters to December as its Wii U console struggled.

Now the market's attention is turning to the March release of the Nintendo Switch console, as the company rushes to develop its next hit product to revitalise growth.

Nintendo's net profit for the nine-month period jumped 153.9 per cent to 102.97 billion yen (S$1.298 billion) after it booked a special gain worth 63.5 billion yen on share sales related to its stake in the Seattle Mariners of Major League Baseball.

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But operating profit dropped 38.1 per cent to 26.3 billion yen while overall sales fell 26.9 per cent to 311.1 billion yen, pushed down by disappointing Wii U shipments.

Nintendo sold the stake in the Mariners to improve its bottom lines amid tough competition from Sony's PlayStation and smartphone game apps that have captured the time and money of game players.

Nintendo abandoned its consoles-only policy and entered the smartphone game market last year.

Wild fluctuations in the forex market pushed Nintendo to revise its annual forecasts, after it downgraded them in October.

The yen, which had appreciated early last year, began to slip in late 2016 as investors returned to the US dollar on hopes that US President Donald Trump would offer huge public spending to boost the US and the global economy.

A lower yen can swell the value of Japanese exporters' foreign-earned income when repatriated.

Nintendo said Tuesday it saw a foreign exchange gain worth 41.3 billion yen in three months to December. It revised its full-year net profit projection to 90 billion yen compared with the previous estimate of 50 billion yen.

"The yen's decline is a boost for Nintendo," said Yasuo Imanaka, an analyst at Rakuten Securities in Tokyo.

But the company lowered its annual operating profit forecast to 20 billion yen from an earlier estimate for 30 billion yen.

The annual sales projection was kept at 470 billion yen.

The smashing popularity of the "Pokemon Go" game app helped boost Nintendo's share price last year and brought renewed global attention to the Pokemon franchise.

The app was developed and distributed by US-based Niantic, a spinoff of Google.

Nintendo has invested in Niantic and owns about one-third of the Pokemon Company, which receives licensing fees for loaning out the brand.

"The impact of Pokemon Go is gradually emerging as Pokemon Go helped stimulate sales of its software using Pokemon characters," said Hideki Yasuda, an analyst at Ace Research Institute in Tokyo.

Looking ahead, all eyes are on the release of Nintendo Switch.

"Now the focus has moved to Switch, which is a touchstone of Nintendo's future," said Mr Imanaka of Rakuten Securities, referring to a hybrid console that can be played at home or on the go, thanks to a removable screen with the controllers attached.

AFP

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