Nintendo Raises Profit Forecast

Officials from Nintendo have announced that the company has revised its financial forecasts for the year, in a filing with the Japanese Stock Exchange. The company will pay shareholders a dividend of ¥270 ($2.51) per share for the fiscal year ended March 31st. The company has also increased its forecast for consolidated recurring profits from a previous estimate of ¥120 billion ($1.1bn) to ¥140 billion ($1.3bn). Forecasts for consolidated net profits have also been increased from ¥70 billion ($644m) to ¥82 billion ($763m). As is often the case with Nintendo, the rise and fall in the company’s profits has more to do with its large foreign and currency investments than its video game sales. In this case, better than expected exchange ratios for the dollar and euro are the main reasons for the increase in forecasts. Brisk sales of the Nintendo DS portable have also helped to a degree, although these have been offset by slower than expected sales of DS software, particularly in the U.S., and continued lackluster demand for the GameCube console. Even so, these huge profits rival those of Sony’s games division and completely overshadow the consistent losses made by Microsoft’s Xbox division – suggesting that Nintendo needs neither third party support nor even a best selling home console in order to generate enviable profits. Indeed, if these new results are taken into consideration, the company’s cash reserves are now estimated at almost $8 billion - a huge sum for what is still a relatively small company, with a substantially narrower retail focus than its rivals. Whether the company will ever seek to use these reserves to broaden its operations is unclear; but it has already hinted at entering the animated movie market, while rumors of acquiring fellow Japanese company Bandai continue.