Times online (by way of Gonintendo)

http://business.timesonline.co.uk/tol/business/markets/japan/article5610164.ece

Leo Lewis, Asia Business Correspondent

Nintendo, the maker of the Wii games console and the favourite safe-haven share on the Tokyo stock exchange, has stunned the market with a 33 per cent cut to its full-year profit forecasts.

Analysts described Nintendo’s guidance as a “baffling and potentially very worrying” sign for worldwide sales of the Wii as recession curtails household spending around the world.

The company itself said that it expected to sell one million fewer Wii units by the end of 2008 than it had previously expected.

Although the company will, in contrast with other Japanese consumer electronics makers, finish the year substantially in the black, the company said that it likely would close the current financial year ending March 31 with net income of about Y230 billion (£1.8 billion), not the Y345 billion that it had been predicting when it spoke to the market in October.  

Nintendo’s results in the third-quarter — the period covering the run-up to Christmas in the United States and Europe — were strong: operating profits were 21 per cent higher than during the same period the previous year.

“Today’s revision suggests that the roaring pace of Wii growth that we’ve seen until now may be over,” Hiroshi Kamide, a KBC Financial Products analyst, said.

“The numbers also imply that we are going to see a sudden collapse in the fourth quarter from record margins to some of the thinnest margins Nintendo has experienced for three years.”

Mr Kamide, who had been the only major analyst with a “sell” recommendation on Nintendo, said that, given how much the company speaks to retailers around the world, the downgrade could imply that “they know something big has gone wrong, and that people are not buying the machines”.

Part of the problem, according to games industry insiders in Japan and the UK, is that the pipeline of “must-have” Nintendo Wii software is less strong now than it was six months ago.

On the most widely read gaming websites, there are few forthcoming Wii titles generating the sort of excitement that preceded the release of Mario Galaxy or Smash Brothers.

One big source of margin destruction has been the soaring yen, which rose 24 per cent against the dollar and 30 per cent against the euro in 2008.

UPDATE

US based analysts disagree.

Arvind Bhatia with Stern Agee was also less alarmed as Kamide in his assessment. "We do not necessarily view the reduction in forecast as a negative given Nintendo has been increasing its forecast all year.

"Rather, we think supply constraints during the holiday season resulted in Nintendo losing sales and management is now factoring this in its revised forecast. We note that Wii hardware was out of stock in the US in late December/early January.

http://www.edge-online.com/news/wiis-roaring-growth-over

Wow, I can imagine the console will still sell well but i cant speak for their software though

That seems odd..?

Wouldn't the downturn in profit be due to the strength of the yen? Nintendo stands strong on both hardware and software sides, so I can't see why else they would lower their expectations like that.

I was thinking it was going to be Bruceongames.

They're talking about quality/mass appeal. The Wii doesn't need that too sell a large amount of software.

I think Nintendo is being over-cautionous - as is there nature.

But getting Wii Sports Resort out sooner rather than later sure as hell wouldn't hurt any.

I think anyone with half a brain can see that actually, something big has gone right for Nintendo this generation. Wii sales are phenomenal everywhere apart from Japan, and that's the one place where, for that demographic, the "must have" games are very much on Wii (i.e. MH3 and DQX). Profits may not be as high as expected, but in this climate, Nintendo are still very much the envy of 99.9% of companies.

This isn't odd. Nintendo overproduced for the Holidays... they weren't expecting the Yen to climb so high, or a worldwide recession to hit so hard either.

No one is safe, and Nintendo is just as well off (better, actually, just not phenominally better) as its competition.

OMG! Nintendo set to make only 1.8 billion pounds! Tragic!

Thats like saying you won the lotto, but it was only going to be 50 million and not 75 million...You'd still be happy on what you got.

Hmm ....

In fear of being attacked by Nintendo Fanboys (and I'm pro Wii)

I have wondered about Wii sales lately, I mean obviously they're low because its the time of year, but to me they just seem too low.

It has to end some time (I think Wii fans are unable to see this)

However there is some strong SW coming out for the Wii this year, but at this point it really needs to be staggering.

God help me for saing this but how long did past craze's last for (Yoyo, Tamagotchie, ect?) The Wii is in no way a "fad" but in the same way the Yoyo and Tamagotichi the Wii has become the IT thing to have.

That said I don't expect the Wii do die like those fads, because this is the VG market not some toy, I just expect the Wii to start selling on the fact its a VG console and not its widespread popularity.