Competition costs Nintendo

July 28th by Ben Parfitt

Increased competition from the likes of Sony and Microsoft has made its mark on under-pressure Nintendo, with the Japanese giant reporting a 78.5 per cent decline in quarterly operating profits.

Consolidated operating profit for the April-June quarter fell to Y3.75 billion from Y17.47 billion the year before, whilst net profit fell to Y14.2 billion from Y22.64 billion. Nintendo blamed the decline in profit on development costs and an increase in hardware sales, which are less profitable than software.

Although the DS handheld sold well, along with key titles such as Nintendogs, the company’s 94 per cent share of the handheld market is under fierce threat from Sony’s new PSP, which arrived in Japan last year and launches in Europe on September 1st.

The GameCube has also underperformed against Sony’s PS2 and Microsoft’s Xbox. The latter intends to launch its new Xbox 360 console this November whilst Sony hopes to roll out its PS3 in spring of next year.

Nintendo has yet to reveal its launch plans for its successor to the GameCube, the Revolution, although sources close to the company suggest a Japanese launch of autumn 2006 is likely.

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