Nintendo First Quarter Profits On The Rise

Officials from Nintendo have released details of the company’s first quarter financial results, with buoyant worldwide sales of the DS Lite contributing to a 10 percent rise in profits. Net income for the company rose from ¥14.1 billion ($120.9m) in 2005 to ¥15.6 billion ($133.8m) in the three months ended June 30th, 2006. Operating profits (sales minus the cost of goods sold and administrative expenses) rose by 700 percent from ¥3.8 billion ($32.6m) to ¥28.8 billion ($247.1m), while sales increased by 85 percent from ¥70.7 billion ($606.5m) to ¥130.9 billion ($1.12bn). As a result of the positive results, the company has increased its annual profit forecast, which will encompass the first few months of sale of the new Wii home console, from ¥65 billion ($557.6m) to ¥83 billion ($711.9m). During the fiscal first quarter, Nintendo sold 4.54 million units of Nintendo DS and DS Lite consoles, a threefold increase on the 1.38 million units sold at the same time last year. The company has already announced it will boost production capacity of the DS Lite from 1.6 million to 2 million, while at the same time stopping production of the earlier model. Sales of DS software also rose threefold, from 5.3 million units in 2005 to 18.4 million units this year. Full year software sales for the format are now expected to be 75 million for the period ending March 2007, an increase of 5 million on previous estimates. Hardware sales forecasts for the year have also increased from 16 million to 17 million. While re-confirming that the release date and price for the Wii would be announced in September (speculated to be at or around the Tokyo Game Show on September 22nd), Nintendo also forecast sales of 6 million units of the new console for the year ending March 2007, on software sales of 17 million units.