Nintendo Slashes Guidance, Expects Wii Sales To Slow (NTDOY)


No industry is immune from the recession, including video games and the game console we once thought was unstoppable, the Nintendo (NTDOY) Wii.

The Japanese company reported earnings last night: Profits were strong, up 21% y/y. But the company forecast its first profit in shortfall in five years, and cut sales estimates of the Wii by a million units.

Part of the blame falls on a stronger yen. But when the far-and-away market leader predicts trouble, the whole industry could be in for a rough year.

Times (UK): Nintendo, the maker of the Wii games console and the favourite safe-haven share on the Tokyo stock exchange, has stunned the market with a 33 per cent cut to its full-year profit forecasts.

Analysts described Nintendo’s guidance as a “baffling and potentially very worrying” sign for worldwide sales of the Wii as recession curtails household spending around the world.

The company itself said that it expected to sell one million fewer Wii units by the end of 2008 than it had previously expected…

“Today’s revision suggests that the roaring pace of Wii growth that we’ve seen until now may be over,” Hiroshi Kamide, a KBC Financial Products analyst, said.

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