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Nintendo Sees Profit Doubling This Year

The company's entry into smartphone games is expected to help make up for weak sales growth of its traditional consoles.

Barone Firenze / Shutterstock

Japanese video game maker Nintendo on Thursday forecast annual operating profit to double in the year through March, with its entry into smartphone games widely expected to help make up for weak sales growth of its traditional consoles.

Nintendo’s latest Wii U console has been a distant third to Sony’s PlayStation and Microsoft’s XBox, while the rise of smartphone games has also led to a decline in customers.

The firm repeatedly resisted investor calls to branch out to mobile to boost profitability. But in March, it partnered with DeNA to develop and operate game apps that the latter hopes to bring in over three billion yen ($25 million) a month.

DeNA last month said the pair would release their first game later this year.

“A new source of revenue is expected from a gaming application for smart devices which will be released this year,” Nintendo said in an earnings release, while it did not announce any new details of the DeNA partnership.

For the year from April 1, Nintendo forecast operating profit would roughly double to 50 billion yen in the year through next March, ahead of the 39 billion yen average forecast of 20 analysts to Thomson Reuters data.

It booked an operating profit of 24.8 billion yen for the previous year, turning to black for the first time in four years as lower costs canceled out the effect of weaker revenue.

The company said new software titles would likely help bolster sales of the Wii U and portable 3DS in the year ahead. But it forecast Wii U sales this year to be roughly flat at around 3.4 million consoles, with those of the 3DS likely to fall to 7.6 million from 8.7 million a year earlier.

Shares of Nintendo closed 2.5 percent lower ahead of the earnings release, versus a 1.2 percent fall in the broader market.

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