Topic: Nintendo Lowers Expectations

[WindyMan]

Even after words of encouragement, Nintendo will likely fall short of their sales goals.

Link: http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=4237103
Source: Reuters


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.  

[nolimit19]

even after the price cut, they couldnt make their expectations

[Chode2234]

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.

[GaimeGuy]

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.  

[RyanGassxx]

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??  

[Ein Sof Aur]

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.  

[mouse_clicker]

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.  

[Mario]

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?).

[thecubedcanuck]

"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.

[KDR_11k]

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.

[vudu]

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.