Nintendo profit decreases 30 percent in first 9 months of fiscal year on poor console sales
By Yuriko Nagano, AP
January 30, 2014, 12:25 am TWN
TOKYO--Profit at Nintendo Co. fell 30 percent in the first nine months of the fiscal year as sales of Wii U home consoles, 3DS devices and game software languished. Top executives announced they would take pay cuts.
The Japanese maker of Super Mario and Pokemon video games reported Wednesday a 10.2 billion yen (US$99 million) profit from April to December, down from 14.55 billion yen a year earlier. It did not break down quarterly numbers.
Nintendo's president, senior managing director, managing director and directors said they will take a pay cut for five months starting in February to take responsibility for the poor performance.
President Satoru Iwata's pay will be halved, two representative directors including reputed game creator Shigeru Miyamoto, were hit with a 30 percent cut. The other seven board members will lose 20 percent of their pay, according to the company.
The popularity of smartphones, tablets and other gadgets has been drawing consumers away from consoles devoted to games. Nintendo has resisted changing its business to incorporate such devices.
"It would be a positive surprise if Nintendo comes out with an online game strategy for smartphones, although the market doesn't expect that move," said Tomoaki Kawasaki, senior analyst at IwaiCosmo Securities Co.
Consumers will still buy Nintendo games if they are wowed by them, but that hasn't been happening, he said.
The Kyoto-based company this month forecast a loss of 25 billion yen (US$242 million) for the fiscal year through March 2014. It had earlier forecast a profit of 55 billion yen (US$532 million). Nintendo had profit of 7 billion yen last fiscal year.