Nintendo profits miss expectations

Bloomberg

Nintendo Co., the world’s biggest maker of video-game machines, on Wednesday posted annual profit that missed analyst estimates amid stalling demand for its Wii U consoles and 3DS handheld players.

Net income was ¥7.1 billion for the year ended March 31, compared with a ¥43.2 billion loss a year earlier, the “Super Mario” creator said in a statement. The result compares with the ¥14 billion median of 15 analyst estimates compiled by Bloomberg. Sales fell 1.9 percent to ¥635 billion.

President Satoru Iwata is under pressure to boost sales of the Wii U, Nintendo’s first new home-gaming console since 2006, which have fallen short of targets since the device’s November debut as consumers increasingly play games on smartphones and tablet computers. The 53-year-old executive probably won’t reach a goal of posting a ¥100 billion operating profit this fiscal year, according to analyst estimates.

“There are no signs of improvement for Nintendo,” Makoto Kikuchi, chief executive officer at Myojo Asset Management Japan, said before Wednesday’s announcement. “The company needs to show customers how fun its machines can be by offering something totally new.”

Nintendo also reiterated the ¥100 billion full-year operating profit target, which compares with a ¥36.4 billion loss for the year ended March 31. The company will probably post a profit of ¥70 billion this year, according to the average of 19 analyst projections compiled by Bloomberg.