Foreign Exchange Headlines Nintendo Losses For April – June Period

0

image

Like Capcom, Nintendo’s new financial year hasn’t quite kicked off in a grand way. The company’s net sales (or revenue, if you prefer) decreased by 25.6% during the April – June period as compared to last year.

 

Similarly, operating profit — a term used for a company’s earnings before deducting taxes and interest — dropped 42.2%. The blame falls primarily on the reduced price of the Nintendo DS in Japan and Europe, and the appreciation of the Japanese Yen.

 

To give you an idea of just how much havoc foreign exchange rates wreaked on Nintendo’s bottom line, foreign exchange losses were reported at over $810 million. This is explained by overseas sales accounting for 86.5% of Nintendo’s total sales.

 

Adding further to the problem were slower DS software sales. As a result, net income was 25,216 million yen — or if you prefer, a loss of $290 million. Despite this, however, Nintendo awarded the highest summer bonuses in Japan this year. Go figure.

 

In spite the company’s financial Q1 performance, Nintendo’s forecast for the remainder of the fiscal year remains unchanged as well. You can bet the launch of the 3DS this fiscal year has a lot to do with it.

Ishaan Sahdev
Ishaan specializes in game design/sales analysis. He's the former managing editor of Siliconera and wrote the book "The Legend of Zelda - A Complete Development History". He also used to moonlight as a professional manga editor. These days, his day job has nothing to do with games, but the two inform each other nonetheless.