Wii Works Magic On Nintendo Results

Strong holiday sales of its Wii videogame console and Nintendo DS portable game device helped Nintendo Co. nearly double its nine-month net profit and raise its sales forecasts for the third time this business year.

The Japanese company said its net profit for the April to December period jumped 96% to ¥258.93 billion ($2.43 billion) from ¥131.92 billion a year earlier. Sales rose 85% to ¥1.316 trillion from ¥712.58 billion.

Nintendo doesn't break out its results for the latest October-December period.

Nintendo has benefited from the tremendous popularity of the Wii, which lets users intuitively play games like virtual tennis and bowling by swinging a controller. In the U.S., the console was in such high demand during the holidays that stores were sold out of them. In Japan, a new game launched in December called Wii Fit, which lets users play exercise games by standing on a board that can detect shifts in weight, saw strong sales.

The Wii, which launched in November 2006, has outsold both Sony Corp.'s PlayStation 3 and Microsoft Corp.'s Xbox 360 world-wide. Nintendo said it now expected to sell 18.5 million Wii consoles this business year, which ends March 31, compared with its forecast of 14 million at the beginning of the year.

Over the past few years, Nintendo has made a conscious effort to expand the videogame market by targeting new game players such as women and the elderly with easy-to-play casual games. In addition to the Wii, its Nintendo DS portable game machine, with its two screens including a touch screen that detects handwriting, has also been a huge hit. The company raised its full-year forecast for the DS to 29.5 million units from 28 million.

Nintendo has already achieved 94% of its full-year net profit forecast. Still, the company, known for its conservatism, kept its profit outlook unchanged even as it raised its operating profit forecast to ¥460 billion from its previous forecast made in October of ¥420 billion. In the year-earlier period, its operating profit was ¥226 billion. It also raised its sales forecast to ¥1.63 trillion from its previous forecast of ¥1.55 trillion. Sales in the year-earlier period were ¥966.5 billion.

The company, which records significant sales outside of Japan, typically adjusts its full-year net profit forecast in early April after it has accounted for the effect of foreign-exchange rates on its business.

Analysts say they believe that videogame sales will continue to be strong despite worries of an economic slowdown in the U.S. as consumers spend more time at home. Nintendo in particular is likely to continue to see strong momentum as highly-anticipated games like Wii Fit enter markets in the U.S. and Europe later this calendar year.

Nintendo raised its dividend forecast for the full year to ¥1,190 per share from ¥1,090 per share. Last year, it paid out ¥690 per share. Nintendo's results are based on Japanese accounting standards.
Source : http://online.wsj.com