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Fri, 31 Jul 2009 Nintendo admits sales slump due to iPhone

The company saw a sharp fall in Wii and DS sales during the April to June quarter but still expects a profit this year

Martyn Williams, with additional reporting by Karen Haslam

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Apple's iPhone is behind a sharp drop in Nintendo's profits, according to the gaming company.

In a conference call about its financial results, a Nintendo representative claimed the DS and DSi were suffering, “due to harsher competition in the portable arena stemming directly from Apple devices,” reports the Mirror.

Nintendo's admission suggests that games from Apple’s App Store on the iPhone and iPod touch are weakening sales of the DS and DSi.

A sharp fall in global sales of Nintendo's popular Wii console and a less dramatic slowdown in sales of the portable DS pushed down the company's sales and profits in the April to June quarter, the company said on Thursday.

Nintendo said net profit for the three-month period was ¥42 billion (US$443 million as of the last day of the period being reported), down 61 percent on the same period last year, while sales dropped 40 percent to ¥253 billion.

Sales of the Wii dropped more than half compared to the same period last year to 2.2 million units during the quarter. The drop was largest in the Americas, where unit sales fell 65 percent, and in Japan, where they declined by 60 percent. Unit sales in other markets, including Europe, fell 47 percent, Nintendo said.

In the handheld market, the company saw unit sales of its DS drop on the same period last year by a million units to 6 million.

Nintendo developed a new version of the DS, called the DSi, in response to falling sales and launched it in Japan late last year. The DSi was introduced to Europe and the Americas at the beginning of April but sales during the quarter were still lower than the same period last year. They only rose in Nintendo's home market of Japan.

In addition to the lower unit sales Nintendo was also hit by the Japanese yen, which has strengthened against both the U.S. dollar and euro since the April to June quarter of last year. The strong yen increases the price of its products that are made in Japan and also reduces the value of sales and profits made overseas when that money is returned to Japan.

Software sales for both the Wii and DS also fell. Nintendo said 29 million Wii games and 31 million DS games were sold during the period. Those figures represent declines of 20 percent and 23 percent respectively against the same period last year. Nintendo attributed the drop to fewer hit titles being released during the quarter.

For the April to March 2010 fiscal year Nintendo said it expects to record a net profit of ¥300 billion on sales of ¥1.8 trillion. The figures are unchanged on forecasts made earlier. Last year Nintendo achieved a net profit of ¥279 billion on sales of ¥1.84 trillion.

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Reader said on Fri, 31 Jul 2009

How can it be a valid argument to say that another company is responsible for your poor sales? If sales are perceived as poorer than desired then your products and your marketing of those products is not good enough. The DSi was hardly a revolutionary update and Nintendo have sat on their laurels with the Wii, scared of developing something that isn't as popular

Neddy said on Fri, 31 Jul 2009

They are kids games machines - hardly a great feat.

Richie said on Fri, 31 Jul 2009

Time for Wii+ better graphics, HD output (HDMI), blu ray player for movies, power block inside of Wii+, free browser and flash player, not built in browser and pay again to unlock it crap.

No wonder sales are down, the Wii & DSi are out dated.

mrweekender said on Sat, 01 Aug 2009

...and to top that off there's now quite a lot of games companies turning their skills towards the iPhone platform. Awesome. I'd rather pay £340 for a phone with the ability to an enormous amount of other things than just play games. Too slow Nintendo you've been fragged lol!

Che said on Sat, 01 Aug 2009

I want a phone that works without being told what I can & can't run on it. Never an iPhone.

Supac said on Sun, 02 Aug 2009

@Che you don't even have an iPhone I bet, therefore you have no clue what you are talking about. Yeah stick with a phone the iPhone is not reAlly a phone it is more of a small mobile laptop in your pocket.

@Che said on Sun, 02 Aug 2009

laughing at your post. did you even bother to read the news story before you posted your silly rant?

Jenni said on Wed, 05 Aug 2009

Well obviously sales are down, that's because the vast majority of people who want a Wii or DS have now bought them, and the DSi doesn't offer enough new stuff.

Nintendo hasn't 'sat on their laurels', do you know how long it takes to develop a games console?? When some of the best Nintendo games alone have taken 7 years to develop? And I don't see Microsoft or Sony offering anything particular new either, just graphically enhanced versions of their old consoles is all they've ever done.

It's like when they reported that The Beatles were losing popularity because they offered a release on itunes and barely anyone bought it - because most people had at least one copy on record, tape or CD.

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