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Japan Earnings Watch: Nintendo and Sony Falter

Sony and Nintendo have generally been moving in different directions, one finding success while the other floundered and restructured.   Heading into the current quarter, with consumer spending weak and a strong Yen threatening margins, there were hints that might be changing (at least for the very near term).

Earnings results in, it has.  Both Sony and Nintendo reported Thursday and both struggled. 

At Nintendo, revenue fell 40% to 253b Yen.  Earnings plunged 61%.     Unit sales of Nintendo’s otherwise infallible Wii fell 57% globally compared to the same period last year. 

Nintendo sold 2,230,000 units between April and June, down from 5,170,000 units last year.  (release PDF)

Wii hardware and software sales were down in all regions.  DS/DSi portable sales held up better but were also down.

Nintendo is attributing part of the decline to the slate of software currently on the market.  That tracks with earnings results returned by game publishers like THQ (solid earnings) and Ubisoft (weak). Where content has been strong, consumers are buying. Where it’s older, or weaker, they’re not.

Nintendo believes new titles will stimulate sales and is holding to its fiscal year unit sales forecasts.

At Sony, the prognosis is less favorable.  The last fiscal year was Sony’s worst in more than a decade and the current quarter didn’t improve on it.

Overall Sony reported a net loss of 71.1b Yen for the first quarter compared to a 35b Yen profit last year.  Sony’s revenue was off 17% to 1.59t Yen.

In the Consumer Products and Devices group revenue fell 27% to 777b Yen.

In game console data, PS3 sales fell off from 1.6m units last year to just 1.1m this year.  PS3 software sales drop from 22.8m units to 14.8m units.   Sales for the PSP Portable also felt pressure, falling from 3.7m units to 1.3m.

One of the few bright spots from Sony was its movie division. The group saw revenue rise 6.5%. 

Given the weak performance, relatively, by both companies’ game consoles, publishers may increase pressure for price cuts in the coming months. There have already been high level calls pressuring Sony.


Related Articles from Metue
THQ Fights to Strong First Quarter
Ubisoft Q1 Misses the Mark
• June NPD: Gaming’s Mixed Bag
Kotick Nudges Sony on PS3 Pricing
May NPD Results: A Closer Look
Stats Survey: Nielsen Takes New Look at Game Sector
Earnings Watch: Microsoft Disappoints, Sony Cuts Forecast


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