THIS IS WHY - http://www.tradingmarkets.com/news/stock-alert/ntdoy_weak-ds-sales-wobble-nintendo-suppliers-partners-1160787.html
TOKYO, Sep 10, 2010 (AsiaPulse via COMTEX) --
Sluggish sales of Nintendo Co.'s (TSE:7974) DS handheld game systems are hurting the earnings of parts suppliers and those that assemble the devices on behalf of the fabless company.
DS sales fell 47 per cent on the year to 3.15 million units for the April-June quarter, partly because consumers refrained from buying in anticipation of the release of a 3-D version later this fiscal year. Sales of the Wii console grew 36 per cent to 3.04 million units that quarter, but are expected to slide 12 per cent for the full year through March 2011.
At Hosiden Corp. (TSE:6804), transactions with Nintendo account for 60 per cent of overall sales. Sales to Nintendo tumbled 59 per cent on the year to 27.6 billion yen (US$329 million) for the April-June quarter on a drop in hardware assembly and parts production. Last month, the firm downgraded its earnings forecast for the full fiscal year, with net profit now seen falling 29 per cent.
Mitsumi Electric Co. (TSE:6767) also downgraded its projections last month due to fewer orders for game system assembly. It now expects an 88 per cent drop in net profit to 700 million yen this fiscal year instead of a 5 per cent gain.
Tabuchi Electric Co. (TSE:6624), which makes internal adapters for the Wii and other components, logged a 69 per cent decline in sales to Nintendo, ringing up just 600 million yen for the April-June quarter. It also downgraded its full-year forecast in August.
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Clearly the 3DS sales projections arn't high enough to cover losses for these parts manufactures BUT they better bloody release it because its going to be the best way to calm their shareholders, and partners, during this fin. year.
“When we make some new announcement and if there is no positive initial reaction from the market, I try to think of it as a good sign because that can be interpreted as people reacting to something groundbreaking. ...if the employees were always minding themselves to do whatever the market is requiring at any moment, and if they were always focusing on something we can sell right now for the short term, it would be very limiting. We are trying to think outside the box.” - Satoru Iwata - This is why corporate multinationals will never truly understand, or risk doing, what Nintendo does.
