Wii | Nintendo earnings warning predicted

Analysts foresee likely profit warning, and net income falling 11 percent thanks to "sluggish sales" and the value of the Yen.

Nintendo started the year on high note, announcing nine-month earnings of $17.1 billion, and a record estimate for its annual earnings. However, by July the picture turned decidedly less rosy with sales sliding 40 percent alongside plummeting profits of 60 percent. Now, Bloomberg is predicting that the Mario factory will cut its earnings forecast and announce its first decline in profits for six years in its upcoming earnings report on October 29.

The Wii was outsold by the PlayStation 3 in September.

The prediction comes from the median of 10 analyst estimates, compiled by Bloomberg. They foresee net income falling 11 percent to £249.3 billion ($2.5 billion, £1.6 billion) this fiscal year, the first drop since March 2004. According to Satoru Kikuchi, an analyst at Deutsche Bank AG in Tokyo, the fall can be attributed to "sluggish sales in the first half [of the year], the price cut for the Wii and currency-related impact. Nintendo may cut its profit projection about 30 percent."

The falling figures come hot on the heels of the latest NPD Group report, which showed Sony's PlayStation 3 console had outsold the Wii in the US by over 60,000 units through September. Both consoles enjoyed a boost in sales thanks to recent price drops in the US which saw the Wii fall to $200 (£121) and the PlayStation 3 to $299 (£182), alongside the new PS3 Slim hardware. PS3 sales more than doubled to 524,200 units compared to the same period last year. Microsoft also acted in the region, dropping the price of its Xbox 360 hardware to $299 (£182).

Nintendo Training 1991

Source: http://www.gamespot.com/news/6237271.html