Nintendo Announces Net Loss, New Prices

Daetrin writes "As reported by CNN/Reuters, Nintendo announced that they expect a net loss for the first half of the financial year, from April through September. Nintendo claims this is mainly due to exchange rates, as the yen has appreciated against foreign currencies during that period. This is reported as the first loss for Nintendo since its establishment. The projection for the full fiscal year was reduced to a [still significant] net profit of about $542 million U.S. Nintendo also announced further price cuts in other territories to follow the cut to $99 in the U.S.: 'Beginning on October 10, the console will have a suggested retail price of 79 pounds (approximately $131.8 U.S.) in Britain, and 99 euros (approximately $115.4 U.S.) in continental Europe. The new price of the GameCube in Japan is now 14,000 yen (approximately $126.5 U.S.)'"

Comments

Yen Problems

[BigDork1001]

Taken from a story at planetgamecube.com : Nintendo blames much of the losses on the unexpected appreciation of the Japanese yen, citing roughly 40 billion yen in foreign exchange losses for the time span. Nintendo also disclosed it had originally planned to reduce the GameCube's price earlier in the year, and expects the new price to vastly improve sales during the holiday season.

Nintendo just dropped the price of the GC. Now sales have gone up significantly. And with the sales of the consoles are sales of games. I'll bet that Nintendo will be back in the black real soon.

Re:Bad Press

[mausmalone]

Yeah... for those of you just glancing and wondering how much the Yen-Dollar conversion factors in, here's the rundown (off the top of my head... everything is estimated; $USD).

1) This is the first time Nintendo has posted a loss ever. Also, this is a mid-year estimate, not an end of year report. It basically means squat.

2) Nintendo expected to gain about $150 million, but lost about $25 million. That means somewhere along the way Nintendo "lost" about $175 million.

3) With Yen conversion losses, Nintendo lost about $360 million. That means that if the Yen conversion had stayed stable, Nintendo would have $360 million more, putting them at $180 million above estimates.

So, yeah, they're doing A-OK, just didn't forsee the Yen doing so poorly. If the Yen picks back up for the second half of the fiscal year, they'll easily beat estimates.