Video game giant Nintendo on Friday chopped its full-year net profit forecast in half, saying slowing sales and a recent pick up in the Japanese currency were eating into its bottom line. The Kyoto-based company said it now expected to eke out a 17 billion ($150 million) net profit in the fiscal year through March, down from an earlier 35 billion yen target.
It also reduced its sales and operating profit forecasts. Nintendo has cut its annual targets at least twice before. Nintendo's announcement comes weeks after its said its nine-month operating profit from April-December had soared 35 percent, and as it gears up for its first foray into smartphone gaming next month.
The company credited its latest earnings results to strong demand for its Wii U console games, including shoot-em-up hit "Splatoon" and the 3DS portable handheld console, although holiday sales disappointed. Japanese exporters such as Nintendo have seen their profits calculated in yen soar in recent years as the unit weakened sharply against the US dollar and other currencies.
The fall made them more competitive overseas and meant the profits earned abroad were worth more in yen. But Japan's currency has reversed course as a plunge in equities and commodities fuelled by fears about the world economy boosted buying of the yen, which is seen as a safe bet in times of turmoil. On Friday, the dollar bought 112.83 yen. The unit was around 121 yen at the end of January and had climbed over 125 yen last summer. "Given the sales trend... and the higher yen, we revised our earnings forecast," Nintendo said.
It added that it now expected revenue and operating profit to come in at 500 billion yen and 33 billion yen, respectively, from an earlier 570 billion yen and 50 billion yen forecast.
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