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Nintendo Ups Forecasts

JULY 24, 2007 • For the three-month period between April and June 2007, Nintendo Co. Ltd. released fiscal first-quarter higher than previously forecasted thanks to robust sales of the popular Wii and Nintendo DS game systems. Net income for the quarter jumped 416% to ¥80.3 billion ($675.8 million) from ¥15.6 billion ($130.9 million) for the same period in 2006. Nintendo also upped its forecasts for the fiscal year ending March 31, with Wii hardware shipments increasing 16.5 million from 14 million, and Wii software shipments growing to 72 million from 55 million. DS hardware shipments are now forecasted at 26 million from 22 million, while DS software shipments have jumped from 130 million to 140 million. Starting on June 25th when Nintendo shares rose as high as ¥46,350 ($374), the gamemaker’s market value jumped to a record ¥6.57 trillion ($53 billion). The boost saw Nintendo move ahead of Sony Corp. in market capitalization, and put the former into the Top 10 on the Nikkei Exchange. Both firm’s exchanged ranked positions numerous times since.

Impact: With the GameCube, Nintendo was routinely lowering its forecast. Now the company has two systems that are white hot and it is up, up. If Nintendo reaches 26 million units for the DS in fiscal 2008 that will be the most ever for a game system. The most Sony ever did for its PlayStation systems was about 23 million units in one year. Nintendo has always been quite profitable even when its system’s have been struggling in the marketplace. Clearly investors are now expecting great things from a Nintendo whose products are number one in the market.



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