Nintendo (NTDOY) cut its profit outlook for the ongoing year after the Japanese game developer reported a sales slump in its Wii U game console which dampened robust performances in the 3DS and the newly-released Super Mario games.
The Kyoto-based company cut its operating profit guidance by 33% to ¥20 billion ($175 million) for the fiscal year ending March 31 despite maintaining its sales forecast. At the net profit level, Nintendo lifted its forecast thanks to a weaker yen to ¥90 billion from ¥50 billion. The revision was announced alongside third quarter results.
Nintendo announced third quarter results and outlook revision after the close of trading in Tokyo, where Nintendo shares ended the day down 1.9% to ¥23,120 each. The stock, which has advanced 34% over the past 12 months, has pared gains since the summer after rallying to as high as ¥31,770.
For the nine months through September 31, operating profit dropped 38% to ¥26.3 billion on a 27% sales decline of ¥311 billion.
The developer of the Super Mario game series highlighted weak performance in the soon-to-be-cancelled Wii U-related products. Hardware sales slumped 75%, while software sales dropped 45% in the third quarter. This more than offset growth enjoyed by the 3DS, which saw hardware sales advance 10% and software sales rise 20%, mainly thanks to strong demand for Pocket Monster titles.
In November, Nintendo said it would scrap the domestic production of Wii U ahead of the March release of its new console The Nintendo Switch.
Super Mario Run, a smartphone game which was released in 150 countries in December, was downloaded 40 million times worldwide in the first four days, the company said.
The decline was not as steep at the recurring level after Nintendo booked gains from subsidiary The Pokemon Company, which played a larger part alongside Google spin-off Niantic in developing augmented reality game Pokemon Go, first released in July. Nintendo has warned investors that its gain from the game would be limited given it was not its main developer.
Meanwhile, net profit jumped 154% to ¥103 billion due to partial sale of the company's stake in Major League baseball team The Seattle Mariners. Consequently, Nintendo lifted its dividend outlook to ¥380 per share from ¥210.
Nintendo adjusted its currency exchange forecast to ¥110 to the dollar from ¥100, and to ¥120 against the euro from ¥115. Overseas sales accounts for about 70% of the company's sales.
Going forward, Nintendo is planning to release the new game console Nintendo Switch on March 3. The company also plans new titles for the 3DS as well as some smartphone games.