The Wii is a victim of competition and the strong Yen
AP: TOKYO — Nintendo Co.’s first-half profit plunged by more than half as sales of its hit Wii home console fizzled in a saturated market, forcing the maker of Super Mario and Pokemon games to slash its forecast for the full year.
The recent global price cut for the Wii also hurt Nintendo, which Thursday reported a 69.49 billion yen ($772 million) profit for the April-September period.
hat was down 52% from 144.83 billion yen a year earlier, and trailed its own May forecast for a 100 billion yen profit. Fiscal first-half sales dropped 34.5% to 548.01 billion yen.
Kyoto-based Nintendo lowered its forecast for the full fiscal year to a 230 billion yen profit from 300 billion yen, blaming the Wii price cut as well as a strong yen, which hurts Japanese exporters like Nintendo.
The company had banked on the dollar costing 100 yen earlier but revised that to 90 yen, about the rate the currency has hovered lately.
Nintendo, which did not break down quarterly numbers, said it sold 5.75 million Wii machines around the world during the period, far short of the more than 10 million sold for the six months last year.
Nintendo reduced the Wii price to $200 from $250 in the U.S., and to 20,000 yen from 25,000 yen in Japan. But the Wii has already been the best-selling home game machine, and a similarly timed price cut on rival Sony’s PlayStation 3 to about $300 has done more to boost that machine’s global sales.
The Wii is now about the same price as Microsoft’s low-end Xbox 360 Arcade. The price on Microsoft’s Xbox 360 Elite was cut to about $300 in August.
The Wii, which has a motion-sensing wandlike controller, has been a hit since its 2006 debut, selling 56.14 million units around the globe.
Nintendo said it hopes to sell 20 million Wii machines during the fiscal year through March 2010, highlighting its ambitions to woo buyers during the critical year-end holiday season with the lower price and the promise of attractive new game software.