Kyoto-based videogame giant Nintendo Co. releases a report of a 61% decline in its full-year net profit, expecting a profit of at least 17 billion yen, but gaining only 16.5 billion yen during the end of its fiscal year.
It was a very steep fall from its 41.8 billion yen in the earlier year.
Nintendo is vulnerable to exchange-rate moves, due to majority of its sales are outside Japan and it has large holdings of dollars and euro, and the recent gain in the yen was a threat to them. Not including foreign-currency holdings, its operating profit is at 32.9 billion yen. Nintendo had anticipated an operating profit of 33 billion yen, in contrast with the previous year’s profit of 25 billion yen.
The videogame powerhouse was expected to report an operating profit of 34 billion yen on revenue of 506 billion yen, with a net profit of 17.4 billion yen, in a survey of fifteen analysts by FactSet. Nintendo stated that its revenue during the term was 504 billion yen.
The sales of Nintendo 3DS hardware slumped due to lack of new popular game releases. The new game titles weren’t able to match the popularity of those released in the previous fiscal year, such as Pokémon, Super Smash Bros. and Yo-Kai Watch.
The Nintendo 3DS is also nearing the eventual end of its life cycle, according to analysts. The gaming platform was released five years ago.
Although, the company is anticipated to reveal a new videogame console, code-named as NX, in an industry trade show in June. Nintendos chief executive, Tatsumi Kimishima, announced this without much elaboration, besides that NX will be released in March 2017.
Nintendo is also embracing its fresh involvement in releasing smartphone games. After its hesitance in jumping into the aforementioned industry, the company finally steered and partnered with DeNA Co. to create mobile games.
Shigeru Miyamoto, a Nintendo executive renowned for creating many of the company’s famous characters, claimed mobile games would be Nintendos new main income pillar last year.
Nintendo announced plans to launch five smartphone games by March 2017. Miitomo, the first smartphone app from Nintendo, was released in March 2016. Miitomo is a free, social-interaction downloadable game that contains in-app purchases. According to Nintendo, it has been downloaded by more than 10 million users globally, and a survey reveals that the app is earning $280,000 a week.
This Wednesday, the videogame powerhouse stated that its second game for smartphones will be Animal Crossing and Fire Emblem, and are to be released this autumn. Nintendo declined to feature its more popular game characters such as Mario from Super Mario Bros. in the smartphone gaming industry for now.