Despite record sales of its Wii and DS consoles, Nintendo has announced that they are slashing their expected yearly profit by a staggering 33 per cent.
The Japanese video games manufacturer has not officially given a clear reason for the warning but they have commented in a statement that “there was a general softness in the Japanese consumer market.”
But the news is not as bad as it seems for the clear leader in video game sales, due to the fact that they are still set to rake in a profit of US $2.6 billion over the fiscal year ending 31 March 2009. But this expected figure is far off the October 2008 forecast of US $3.85 billion.
Analysts around the world are puzzled by the news and are now questioning the company everyone was touting as recession proof.
Speculation is also rife that the announcement implies that consumer interest in the Wii has fizzled out and many are worried for company’s prospects for the future.
But all of this aside Nintendo is still set to earn net sales and operating profit increases of 8.8 per cent and 8.7 per cent respectively over the year.
Evidently the video game manufacturer’s expectations have been hit hard by the recent economic downturn and the subsequent strength of the yen in comparison to the US dollar, has only made the situation worse.
But it my also come down to the fact that Nintendo did not have any major blockbuster game releases for the entire second half of 2008. Has the popularity of the Wii and DS consoles in turn made the company lose focus on their software production, only time will tell?