Officials from Nintendo have announced that the company is raising its 2006/07 net profit forecasts by 20.5 percent, ahead of market expectations. The stronger than expected profits are due to continued high sales of the Nintendo DS console and a weaker than expected yen.
Sales for the Nintendo DS, which continues to sell out on a regular basis in Japan, and has also performed well in the West since the release of the redesigned Nintendo DS Lite hardware, have been so buoyant the company has raised sales forecasts by 18 percent. The new profit estimate also includes initial sales of the forthcoming Wii console, which is being sold at profit from launch.
Nintendo’s group net profit is now set at ¥100 billion ($850m) for the twelve months ending March 31st, an increase from the ¥98.4 billion ($835m) reported last year. Sales estimates have also been raised by 15.6 percent to ¥740 billion ($6.28bn) and operating profits by 16 percent to ¥145 billion ($1.23bn).
"We had expected better earnings than the company had forecast for the first half, but it was surprising to see how much it raised its full-year forecast, especially the sales outlook," said Nomura Securities senior analyst Yuta Sakurai, as quoted by the Reuters news agency.
"Nintendo had expected DS sales to slow once its Wii and Sony's PlayStation 3 game consoles hit the market, but we see no sign of that ... and it looks like the company shifted its view and now expects DS sales to remain strong through the year-end," he added.
Unit sales forecasts for the Nintendo DS have been raised from 17 million to 20 million for the year, with expected software sales up 9 percent to 82 million. Game Boy Advance console sales expectations have also been increased by 32 percent to 3.3 million units.