Nintendo shrinks its outlook for the remainder of the year

Video game giant Nintendo has adjusted its outlook for the remainder of the fiscal year, and forecasts a 33% lower profit than previously expected.

Nintendo's financial reports today showed the great impact of large changes in exchange rates. As the Japanese yen sharply climbed in value, sales in the European and American markets dropped in value. This is evidence that even if sales are high, their mitigating effect on profits is substantially lessened by global currency exchange.

In the third quarter of its fiscal year, Nintendo's net electronic entertainment sales were ¥1,533.6 billion, with roughly 80% of that coming from foreign markets.

In the first nine months of this fiscal year (from April '08 - March '09), Nintendo has sold 25.62 million DS Lites, 63.78 million DS games, and 20.52 Wiis. The DSi, Nintendo's newest handheld system, premiered on November 1 in Japan, and has already sold 1.66 million units there. Nintendo expects sales of all its systems to come to a rather abrupt halt in the post holiday season, and finish the year with 31.5 million DSs and 26.5 million Wiis sold.

The company experienced a profit squeeze during the last quarter, as assets decreased by ¥34.4 billion and liabilities increased by ¥23.5 billion. The result was a 10.6% drop in net income. Nintendo attributed this to the payment of dividends and income taxes coupled with the rise of notes and accounts payable.