Nintendo Announces First Half FY 2011 Financial Results

[trestres]

kowenicki said:

trestres said:

Train wreck said:

NYANKS said:
So can people predict the next results Nintendo posts? Predict the next 6 months please!

Well first they will not make their 16M projection for the 3DS unless another price cut is in the cards

Second, if people actually read the press report that nintendo sent out, they are projecting a value of 78 Yen/Dollar for the next six months, the current rate is at teh mid 75's, they have a average of 109 Euro/Yen but its currently at 105, so more exchange related losses

Third, they north american business is deteriorating at a alamaring clip, they are being burnt by the X360 and PS3 as multiplat titles are going to those systems.  They only shipped 520k units from april to sept.

Fourth still a relative weak holiday lineup for the Wii, they are trying to midigate software losses by bundling their top tier games with Wii and 3DS

Fifth, Vita release in Japan eating into 3DS sales

Sixth WiiU final form wont be shown until E3 2012, so you looking at three quarters of subpar performance from two declining systems and one in trouble

so on and so on

Isn't it the other way around? Nintendo's results are in Yen, so if the Yen goes up, they will get more Yen out of each dollar they receive from the US and therefore post better results IN YEN.
If the Yen, on the other hand, got stronger (ie appreciated versus the dollar) then each dollar they receive will translate in less Yen and therefore the results posted will be worse IN YEN.

Of course here we are ignoring the local economic factors of Japan like inflation, recession, tax adjustments, minimum wage fluctuations, etc.

The actual problem of the Yen is that it is getting stronger, so when they receive dollars, each dollar gets converted into less Yen than before. Their results never mention dollars or euros, so as long as they get more Yen out of any of the other foreign currencies, they will be posting better results for the same amount of incoming foreign cash.

Your post is confused....

If the yen strengthens (less dollars to the yen) they do worse.  The problems that all Japanese exporters are facing is as a direct result of a strong Yen.

The bolded part in the other post is correct.  If they are expecting a yen/euro rate of 109 yen for a euro and it is currently 105 then they are LOSING money as they are getting 4 less yen in revenue for each euro they take.... and alarmingly it isnt insignificant. 

For example: Sony loses 6 billion yen in revenue for every 1 yen decline against the euro.  (so in the bolded example, 4 yen to euro gap represents 24billion yen of lost revenue)

People might want to hold on to their hats for Sony results...

 

 

 

Stronger Yen doesn't mean less dollars to the Yen... Stronger Yen means you get more dollars for each Yen you have.

And that's what hurting Japanese industries who export, as their quarterly or annual reports (in YEN) look terrible when compared to previous years because they have been getting less Yen for each dollar/euro they've received, even if sales had increased in many cases.

I don't understand your reasoning for the bolded part. If you are talking about what they could have earned this quarter had the exchange rate been like the projected for the next half of the year, then you are kind of correct, but that's a hypothetical loss. Losses or gains in percentages are always compared to PREVIOUS results. You can't compare something against something that hasn't happened.

What I was telling trainwreck was that during the next half of the year, if the Yen weakens (more Yen per dollar), then for each dollar they receive, they will get MORE Yen than in this first half. And that's what ultimately counts since all their reports are in Yen.