Financial News

  • 30 January 2014, 7:11

Nintendo Profit Plunges 30% On Wii Woes

Japanese games manufacturer Nintendo has seen its nine-month profit plunge by 30%, prompting its boss to cut his pay in half.

The slump was blamed on poor sales of the Wii U console as gamers flock to the Microsoft Xbox One and Sony PlayStation 4.

Company president Satoru Iwata said he would slash his salary for five months to atone for the firm's woes.

He said other directors would see their pay cut by an average of 25% in the same period.

Sales falls occurred in all territories, with the biggest decline in the home Japanese market being 13% compared to the previous year.

The popularity of smartphones, tablets and other gadgets has been drawing some consumers away from consoles.

Nintendo's announcement comes shortly after it warned of making a loss and a drastically reduced its forecast for full-year sales.

It said earnings reached 60m in the nine months to December, with revenue down 8.1% - 255m - to 2.9bn

The company's operating loss in the period was 9.2m, down from a profit of 33m. It now expects a full-year loss of 145m.

Total hardware sales across its Wii U, DS, 3DS and Wii brands fell by six million units, year-on-year. No brands increased sales.

The high margin software sector saw sales fall by 21.5 million units year-on-year, with DS software down 71% and Wii down 48%.

However, it did see software growth in the Wii U of 37% and 3DS of 45%.

Nintendo owns the Donkey Kong and Super Mario brands and its shares have dropped more than 11% in a month.

The plunge started after it reassessed the Wii U sales forecast from nine million consoles to 2.8 million for the year.

Experts have slammed the new system's limited game selection, preferring the additional features available on competitors' products.

By comparison, Sony has sold more than 4.2 million PlayStation 4 consoles by the start of this year, less than two months after its release.

Microsoft's Xbox One sold more than 1.1 million consoles in its first day of release last November.

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