Wii Pushes Nintendo Profit Up 60 Pct

Wii sales pushed Nintendo's fourth quarter profit up 60 percent, but slowing Nintendo DS sales have the company forecasting only moderate growth.

Nintendo has announced financial results for its fiscal year ending March 31, 2008: sales of its Wii video game console pushed the company’s profits up 60 percent compared to the same quarter last year, but slowing sales of its Nintendo DS handheld systems are leading the company to forecast only a reserved nine percent growth for its next fiscal year.

Nintendo says it shipped 18.61 million Wii consoles to retailers and distributors during the last 12 months, making for a worldwide total of 24.45 million Wii consoles out the door since they began shipping in November 2006. Nintendo forecasts shipping an additional 25 million Wii consoles during its new fiscal year. Nintendo builds about 1.8 million Wii consoles a month right now, and may increase monthly production to 2.4 million units during mid-2008. Right now, the Wii enjoys a worldwide games-to-console sale ratio of 6.07 games per system, meaning Wii users are pretty likely to purchase additional titles for their console rather than stick with a handful of games.

At the same time, the company said it expects sales of its Nintendo DS handheld game system to fall to about 28 million units next year, from a total of 30.3 million units this year. The Nintendo DS remains a healthy publishing platform, however: Nintendo says 5.24 DS games are sold for every DS handheld.

Nintendo’s conservative profit forecasts for its next year may have more to do with currency and economic fluctuations than worries about increased competition from Sony’s PlayStation 3 game console (which offers Blu-ray capability). Some industry watchers seem to feel consumers consider the Wii a casual gaming platform that doesn’t directly compete with the higher-powered (and significantly higher-priced) PS3.