Can Nintendo Bounce Back From Profit Woes with Wii?

At a news conference in Osaka, Nintendo Senior managing director, Yoshihiro Mori, said the price of the Wii would be 25,000 Yen ($220) or lower in Japan and $250 or even lower in the United States. Almost everybody knows how much thie Ninty baby will go…but does anyone know why?

The reason for that price is due to the recently posted 19% fall in annual operating profit. In English: Nintendo earned less. Therefore, if the price of the Wii would be more attractive than that of the PS3 or that of the Xbox 360, then Nintendo can bounce back in a jiffy.

The 19% fall was due to the fact that there is less demand for the GameCube and the Game Boy Advance Machines. The profit fall was not compensated by the hot-selling Nintendo DS because older gaming consoles/ machines generally cost less to make, ergo, if the older gaming consoles are selling well, this would be synonymous to a fatter profit margins for the company. In this case, for Nintendo.

The problem is that even with the Gamecube pricecut and the attractive price of the Game Boy Advance, demands for older Nintendo gaming consoles were low which means less profits.

Now, as a way to cope with the posted 19% fall in annual operating profit, the Ninty folks are focusing their attention on the Wii and the DS. Given Wii’s attractive prices, innovative ways to play it and robust demand for DS portable games, things are looking up for Nintendo despite Thursday’s fall in its share panelists say.

According to Hiroshi Kamide, a games analyst for KBC Securities Japan, “they (Nintendo) basically have a very stable and growing handheld business and it looks like for the first time in 10 years they will actually have a successful console business.” Nintendo aims to sell 16 million units of DS portable players in the year to March, up from 11.46 million last year.

Now, whether Nintendo bounces back from this profit setback is something that we don’t know. But judging by how long the “Wii line” was during the last E3 , I wouldn’t blame the Nintendo people for hoping that the Wii is the panacea to all their profit woes.

At a news conference in Osaka, Nintendo Senior managing director, Yoshihiro Mori, said the price of the Wii would be 25,000 Yen ($220) or lower in Japan and $250 or even lower in the United States. Almost everybody knows how much thie Ninty baby will go…but does anyone know why?

The reason for that price is due to the recently posted 19% fall in annual operating profit. In English: Nintendo earned less. Therefore, if the price of the Wii would be more attractive than that of the PS3 or that of the Xbox 360, then Nintendo can bounce back in a jiffy.

The 19% fall was due to the fact that there is less demand for the GameCube and the Game Boy Advance Machines. The profit fall was not compensated by the hot-selling Nintendo DS because older gaming consoles/ machines generally cost less to make, ergo, if the older gaming consoles are selling well, this would be synonymous to a fatter profit margins for the company. In this case, for Nintendo.

The problem is that even with the Gamecube pricecut and the attractive price of the Game Boy Advance, demands for older Nintendo gaming consoles were low which means less profits.

Now, as a way to cope with the posted 19% fall in annual operating profit, the Ninty folks are focusing their attention on the Wii and the DS. Given Wii’s attractive prices, innovative ways to play it and robust demand for DS portable games, things are looking up for Nintendo despite Thursday’s fall in its share panelists say.

According to Hiroshi Kamide, a games analyst for KBC Securities Japan, “they (Nintendo) basically have a very stable and growing handheld business and it looks like for the first time in 10 years they will actually have a successful console business.” Nintendo aims to sell 16 million units of DS portable players in the year to March, up from 11.46 million last year.

Now, whether Nintendo bounces back from this profit setback is something that we don’t know. But judging by how long the “Wii line” was during the last E3 , I wouldn’t blame the Nintendo people for hoping that the Wii is the panacea to all their profit woes.