Nintendo to Debut New Game Machine Next Year to Boost Sales
Nov. 13 (Bloomberg) -- Nintendo Co., the world's biggest maker of hand-held game players, said it will debut a new video-game machine in Japan next year and start console sales in China to spur revenue after posting its first loss since going public in 1962.
The company will start selling the next-generation video game machine next year in Japan. It didn't say whether the machine would be hand-held. Sales of consoles will begin in China this month, Nintendo said.
Nintendo's new machine and China sales push follow its move in October to slash prices in Europe and Japan for its GameCube console, hoping to spark holiday-season sales and compete with rival Microsoft Corp.'s Xbox and Sony Corp.'s PlayStation 2. The company today reported a first-half loss, citing the stronger yen against the dollar and lower-than-expected sales of its GameCube console.
``GameCube is selling well after the price reduction, and Nintendo is in a better position than Microsoft, because the GameCube is more popular with younger kids,'' said Kota Nakako, an analyst at JP Morgan Securities Ltd. in Tokyo. ``The price reductions should have been factored into the company's full-year forecast, and should not affect earnings.''
Nintendo's group net loss totaled 2.89 billion yen ($26.6 million) in the six months ended Sept. 30. The Kyoto-based company generated profit of 19 billion yen a year ago. First-half sales rose 1.6 percent to 211.4 billion yen, the company said in a statement released through the Osaka Securities Exchange.
Nintendo today repeated its full-year net income and sales forecasts announced October. Sales are expected to total 550 billion yen and net income 60 billion yen for the 12 months ending March 31, 2004.
Nintendo also reiterated its full-year forecast of shipping 6 million GameCube video consoles, and 20 million GameBoy Advance hand-held games.
The stronger yen reduced the value of overseas assets by 40.3 billion yen, the company said. Operating profit rose 3 percent to 28.7 billion yen in the period.
The average value of the yen against the dollar in the period was 118 yen, compared with 123.08 yen a year earlier. The yen recently traded at 108.35 at 5:00 p.m. Japan time.
Last Updated: November 13, 2003 03:01 EST Bloomberg