Late on Friday Nintendo issued a profits warning. The Japanese firm had previously expected to make profits of ¥100bn for the period ending 31 March 2014 but this headline figure has been revised to a loss of ¥35 billion. In Tokyo today the markets reacted and shares plunged by 18 per cent as trading began.
Now the Tokyo markets have closed we find that the share price recovered steadily during the Japanese trading day and ended at just six per cent down on Fridays closing price. Perhaps that’s because of the info from the post-results press conference started to filter though and calm investors down.
Company president Satoru Iwata spoke to nervous investors and soothed them with hints of Nintendo putting games on smartphones. Iwata said he was thinking about a "new business structure" and "given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business." He added a warning that "If we stay in one place, we will become outdated". However he said that there isn't a simple quick fix coming "It’s not as simple as enabling Mario to move on a smartphone." At least he said 'smartphone', as previously we had only really heard about a Nintendo Android tablet in the works for educational style activities and games.
Looking back at the announcement of an operating loss on Friday, there were drastic cuts to sales forecasts of both the Wii U and also the relatively popular 3DS handheld behind the numbers. The BBC reports that Nintendo lowered global Wii U sales forecasts from 9 million to 2.8 million consoles – that's an approximate 70 per cent cut. Additionally the 3DS sales forecast was reduced from 17 million to 13.5 million units. An analyst talking to the Beeb offered a slightly different view to Iwata, above, concluding that "We believe Mario on mobile is coming," – it is that simple.
