Nintendo To See Slowdown In 2008 After Posting Bumper 07 Results

Nintendo has had a good year with sales up 73-percent, operating income up 115.6-percent, and profit up 47.6-percent on the back of the hugely successful Wii and continued strong sales of the DS handheld.

The company posted $16.1-billion in sales and a profit of $2.48-billion, though the company has suffered losses related to the strengthening Yen on the dollar and Euro, with the company experiencing a foreign exchange loss of about $900-million in 2007. In 2008 the company expects about $117-million in forex losses, with 80-percent of Nintendo’s business being doing outside of its home country Japan.

The company is expecting a slowdown in 2008, with net income set to rise a more modest 26.3-percent and a mere 7.6-percent increase in sales. The Nintendo DS is set to suffer a slowdown, with sales shrinking 8-percent in 2008, though overall the DS has been confirmed as the best selling handheld of all time, with 30.31 million units sold worldwide.

The Wii has been the big driver of sales, shifting 18.1 million units last year for a total of 24.5 million units moved since the console was launched in November 2006; and the company expects to sell a further 25 million in 2008 as overseas markets continue to buy up the console faster than Nintendo can produce units. In Japan however Nintendo believes that growth of Wii sales has peaked.

Nintendo has proved itself to be the most profitable of the players in the current console war, being the only maker to actually turn a profit on each unit sold. Its strategy in the past five years, from the DS to the Wii, has paid off handsomely and the company can expect continued profitability for years to come, even if it will suffer a slowdown in growth.