Nintendo Predicts Much Lower Profits


Posted July 28, 2011 - By Stephen Johnson

The Road to E3 2011: Nintendo Report Card

This is a dark time for Nintendo. The popular and industry reception to the announcement of the Wii U at E3 this year was not, shall we say, entirely positive. The sales of Nintendo's new handheld were not, shall we say, stellar, necessitating a price drop the Nintendo 3DS. Nintendo's stock is at a, shall we say, five-year low. All of this adds up to a loss in profits. Nintendo predicts 82 percent lower profits this fiscal year. This is, shall we say, terrible.

The company is far from broke. In spite of all the bad news, they still predict $257M in profits this year, but that's a lot less than the  $1.41B it previously expected.

Nintendo says the lower profits are due to "stronger-than-expected yen appreciation and sales performance, the decided price reduction of the Nintendo 3DS hardware, and the sales outlook for the holiday season." In other words: People didn't buy the Nintendo 3DS in the numbers we would like.

So put yourself in the head of an investor for a minute. Nintendo's stock is really low right now; the question: Will it fall further, or is this the rock bottom? Do you have faith in the Wii U being a hot-seller when it launches? Do you have faith in that indefinable Nintendo magic to bring the company back to the money-printing juggernaut it was only a couple years ago?  Personally, I do. I believe in Mario and company.  Leave your opinion in our comment section.

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Nintendo Predicts Much Lower Profits


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