Nov 1, 2009

Nintnedo Loses Some Steam

By Andrew Shin

Earlier this week Nintendo Co. Ltd reported that quarterly profits had dropped 52% and as a result has reduced its annual earnings forecast for the year. Their operating profits fell $90 billion Yen (approx. $709 million US) in July-Sept compared to $133 billion Yen a year earlier. This has been a difficult quarter for Nintendo coupled with the declining sales trend that has hit them throughout the year.

One can't be completely surprised by this latest quarterly report as Nintendo hasn't done enough to spark new and heightened interest in their Wii console due to a lack of engaging and exciting game titles. In fact, the only big release in the last few months has been the Wii Sports Resort game that incorporates the use of the new Wii Motion Plus peripheral for the Wii Remote. The other obvious factor in all of this is the the recent price cuts to the PS3 and Xbox 360 consoles. Sony having introduced a new slimmer PS3 for $299 CAN and the Xbox 360 Elite dropping in price to $299 as well has helped both consoles to gain more marketshare with respect to sales. In fact, for the first time since its release, Sony's PS3 outsold the Wii as the top selling console in the U.S. this past September according to NPD numbers. As a result, Nintendo responded by also dropping the price on the Wii to $219 CAN.

To have dominated as long as Nintendo has since the release of the current gen consoles, it's only expected that they would lose some of its lustre. But at the end of the day, business is business for Nintendo and if they hope to recover, many in the gaming industry - both analysts and gamers - feel that Nintendo has to deliver with a solid line up of titles and new gaming experiences that will keep both the casual and core gamers interested enough to spend their dollars.