Pachter: New Nintendo Handheld, Due To DS Japan Weakness?

Wedbush Morgan analyst Michael Pachter predicts that Nintendo might launch a new handheld in Japan during the current fiscal year, which ends March 31st, 2009. In a new analyst note following Nintendo's financial upgrades today, Pachter specifically commented: "There is some possibility that Nintendo will launch a new handheld device during the fiscal year." He added by way of clarification and reasoning on the comment: "DS sales have grown dramatically in the U.S. and Europe, offsetting weakness in Japan, leading us to expect an introduction of a new device in Japan before the end of the fiscal year." Nintendo itself noted the decline in its first quarter results released in July, with the console still selling strongly in the West but being consistently outsold by the PSP, and sometimes Wii, in Japan. However, the company has given no indication of plans for a new variant of the console – either in the manner of the Nintendo DS Lite or a wholly new successor. Recent rumors have suggested a new "dual-touch" Nintendo DS with a larger display and two touch screens is a possibility, however. If Nintendo decides to launch a new handheld, the analyst firm expects the company to exceed its revenue and earnings-per-share estimates for the current year, and to experience solid revenue growth next year. Following Nintendo's increase of its full-year profit forecast by 26 percent earlier today, Wedbush-Morgan raised its own FY09 revenue estimates to ¥2,030 billion ($18.7 billion) from ¥1,850 billion ($17 billion), as well as its FY10 revenue estimates ¥2,010 billion ($18.5 billion) from ¥1,800 billion ($16.6 billion). The firm predicts that Nintendo's healthy financial performance will continue through the end of the current fiscal year and into the next. Though hardware sales are expected to "modestly decline" next year, software sales are expected to experience "dramatic growth."