Nintendo has announced today that it will cut its year-end profit estimate by 10%, will fall about one million units short of its six million yearly GameCube sales goal, and will be two million shy of its twenty million Game Boy Advance sales target.
Because of the stronger Yen in the exchange rate market, all of the US Dollars Nintendo makes doesn't turn into as much Yen as it would had the Japanese currency been weaker. As a result, Nintendo's U.S. Dollar assets have dropped by $540 million to around $5 billion over the last nine months, simply because of the currency exchange rates.
GameCube sales have skyrocketed since the price drops for the system across the globe, but they haven't done so enough to catch up to the PlayStation 2, which Sony says has met its sales goals. The explanation Nintendo gave is that the sales weren't as good as they should have been in the domestic (Japanese) market, even though the system is doing well here and in Europe. Despite this, Nintendo will not re-adjust the target numbers.
Even though the Game Boy Advance will also likely not meet its hardware sales target, the software side of things is looking great. Nintendo has already met its GBA game sales target of 60 million, and still has a few months left yet to surpass it before their fiscal year finishes up at the end of March.
Title: RE:Nintendo Lowers Expectations
Post by: nolimit19 on January 29, 2004, 10:11:16 AM
even after the price cut, they couldnt make their expectations
Title: RE: Nintendo Lowers Expectations
Post by: Chode2234 on January 29, 2004, 10:18:17 AM
Its crazy how much the weak dollar has affected Nintendo's "war chest" I didn't realize how much of Nintendo's assets were here in America.
Title: RE: Nintendo Lowers Expectations
Post by: GaimeGuy on January 29, 2004, 11:02:22 AM
If you honestly expected Nintendo to sell five million Gamecubes in a couple months after the price drop, well, shame on you! Although, maybe if they had one more month....
Or maybe they'll make it.
Title: RE:Nintendo Lowers Expectations
Post by: RyanGassxx on January 29, 2004, 11:43:32 AM
So basicly they had to lower expectations NOT because of any kind of sales deficiency but only because they are somewhat at the mercy of the USD-Yen exchange rate fluxuations? Thats very strange... so Nintendo's proffits grow when the economy of its homeland plunges?? So Nintendo HOPES for Japan's economy to dive??
Title: RE:Nintendo Lowers Expectations
Post by: Ein Sof Aur on January 29, 2004, 12:02:10 PM
Quote So basicly they had to lower expectations NOT because of any kind of sales deficiency but only because they are somewhat at the mercy of the USD-Yen exchange rate fluxuations? Thats very strange... so Nintendo's proffits grow when the economy of its homeland plunges?? So Nintendo HOPES for Japan's economy to dive??
Wrong. A strong economy does not necessarily lead to a strong dollar. The Yen is stronger than usual because the interest rates in Japan are higher than they used to be. The interest rates are higher now simply because Japanese bankers want to incite people to save. The banks will then use this money people have saved to lend loans to businesses and other people which encourages investment in capital (buildings, equipment, etc.). In other words, they have a bad economy and they're trying to get it started again.
P.S. - This also makes it harder to export products from Japan since their products are now priced relatively higher than they were before the bad economy.
Title: RE:Nintendo Lowers Expectations
Post by: mouse_clicker on January 29, 2004, 02:41:38 PM
Profit expectations don't directly affect sales expectations- Nintendo dropped the sales expectations because they physically can't sell the required units to meet them. They dropped the profit expectations (in Yen) in part due to not being able to meet the sales expectations, but mainly because the Yen is getting stronger, making the same amount of US dollars worth less Yen than before. It's all the same value essentially, though, I really don't see why the actual number attached to the Yen should matter, considering that Yen is worth more now.
Title: RE:Nintendo Lowers Expectations
Post by: Mario on January 29, 2004, 10:53:29 PM
Ouch, Nintendo's stocks have fallen 8.57% since they announced they were lowering their expectations. Discouraging, but it's nothing major (or is it?).
Title: RE: Nintendo Lowers Expectations
Post by: thecubedcanuck on January 30, 2004, 02:34:27 AM
"and I wouldnt advise on buying Nin stock just quite yet."
posted by me on Jan 28
As for the Yen, it is only one piece of the puzzle, check out a NIN filing and you will see why investors have been fleeing.
Title: RE: Nintendo Lowers Expectations
Post by: KDR_11k on January 30, 2004, 03:41:13 AM
I don't consider the behaviour of investors interesting or logical. They run away at the slightest sign of trouble, they'll probably call a doctor when driving over a bump in the road. Investors fleeing or coming means zero for me, the Wall Street should be outlawed for all I care.
Is the Yen really that strong? Considering the Euro-US Dollar exchange rates, I'd say the dollar is just very weak.
Title: RE: Nintendo Lowers Expectations
Post by: vudu on January 30, 2004, 04:56:30 AM
cubed - you can stop calling nintendo NIN anyday now. it's not that hard to just type out nintendo. every time you say NIN i think nine inch nails.
