Nintendo Cut Profit Estimates News

Troubled times once again hit Nintendo, as it emerged today that the Japanese giant has been forced to cut its full-year profit estimate by 10%.<br><br>Mere weeks after reporting strong demand during the Christmas period (although based upon dubious statistics), the Kyoto based company reported that it may fall short of its full-year sales target for both the GameCube and surprisingly the GameBoy Advance.<br><br>"We are not changing our GameCube sales target, but there is a definite possibility that we might fall short by around one million units," Nintendo Senior Managing Director Yoshihiro Mori told a news conference in Osaka.<br><br>As a result Nintendo were forced to cut its Net profit estimate for the full year to March, from a November forecast of 60 billion yen to 54 billion yen. It also cut its operating profit estimate by 9% to 105 billion yen and sales forecast by 7% to 510 billion yen. These figures come considerably less then most financial analysts were expecting, however it should be noted that the strong position of the yen against the dollar inflicted a currency-related loss of 57.7 billion yen on Nintendo’s $5 billion worth of dollar-dominated assets.<br><br>Whilst the troubled times of the GameCube can be of no surprise to anybody, the fact that Nintendo claims the GameBoy Advance may fall short by 2 million units of its expected 20 million certainly comes as a worrying sign for Nintendo. The continued success of the GameBoy has widely been attributed as keeping Nintendo there, certainly signs of it slowing down and the threat of the impending Sony PSP will be off some concern to Nintendo executives.<br><br>Despite the brief raise in sales in America after the GameCube price cut, similar moves failed to have such an impact in either Japan or Europe; leading Nintendo to further worry about meeting software sales targets, with Mori-san claiming:<br><br>"One area of weakness with our sales is the domestic market. A possible knock-on effect from lower GameCube hardware sales could mean lower software sales." <br><br>Despite the announcement, Nintendo’s shares closed up 0.27% at 11,200 yen against a Nikkei average fall of 0.67%.