{"id":470324,"date":"2011-07-29T03:29:35","date_gmt":"2011-07-29T03:29:35","guid":{"rendered":"http:\/\/www.ghanamma.net\/2011\/07\/29\/nintendo-shares-plunge-after-loss\/"},"modified":"2011-07-29T03:29:35","modified_gmt":"2011-07-29T03:29:35","slug":"nintendo-shares-plunge-after-loss","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2011\/07\/29\/nintendo-shares-plunge-after-loss\/","title":{"rendered":"Nintendo shares plunge after loss"},"content":{"rendered":"

28 July 2011<\/span> Last updated at<\/span> 23:29 ET<\/span><\/span><\/p>\n

Shares in Nintendo have plunged on the Tokyo stock exchange a day after the company said it made a loss in the first quarter.<\/p>\n

Its shares fell by 20% in early trading as investors reacted to the worse-than-expected earnings report.<\/p>\n

On Thursday, Nintendo reported a net loss of 25.5bn yen ($324m, \u00a3201m) for the April-to-June quarter, its first-ever quarterly loss.<\/p>\n

The company also cut its full-year profit forecast.<\/p>\n

Nintendo said it now expects a net profit of 20bn yen for the year to March 2012, down 82% from its previous projection.<\/p>\n

‘Underweight’<\/span><\/p>\n

Continue reading the main story<\/a><\/p>\n

\u201cStart Quote<\/span><\/h2>\n
\n

We believe the 3DS will be a heavy weight on earnings over the medium term\u201d<\/p>\n<\/blockquote>\n

End Quote<\/span> Hiroshi Kamide<\/span> JP Morgan<\/span><\/div>\n

Nintendo earnings were hit by weak sales of its new gadget, the handlheld 3DS console.<\/p>\n

In an attempt to boost sales the company has announced huge price cuts.<\/p>\n

The price in Japan will be about 40% less – retailing at 15,000 yen. In the US, the price will drop next month to $169.99 from $249.99.<\/p>\n

However, analysts said the price cut may hurt the company’s earnings even further.<\/p>\n

“The timing of the 3DS hardware price cut is surprising, given the major in-house software releases,” said Hiroshi Kamide of JP Morgan.<\/p>\n

“We believe the 3DS will be a heavy weight on earnings over the medium term,” he added.<\/p>\n

JP Morgan also cut its rating on Nintendo from “overweight” to “underweight,” saying the current situation was worse than feared and the outlook uncertain.<\/p>\n

Tired customers?<\/span><\/p>\n

To make matters worse for the gaming giant, industry watchers say sales of the 3DS are unlikely to turn around anytime soon.<\/p>\n

“Software is a big problem. Right now there are not many games available for the 3DS,” said David Abrams, of CAGCast Video Game.<\/p>\n

Mr Abrams added that while the 3DS has had a lukewarm response, smartphones continue to capture an increasing share of the gaming market.<\/p>\n

He said easy availability of games and their low cost meant more and more people were preferring smartphones over specialised gadgets.<\/p>\n

“The question is, are people willing to spend a premium to play the next Mario game or would they spend that amount to buy close to 40 games on their smartphones,” he said<\/p>\n

Mr Abrams added that despite the launch of its latest version, the DS gadget has been losing its charm.<\/p>\n

“The reality is that people may be tired of the whole DS concept. It has been around for almost seven years,” he said.<\/p>\n

“May be its not that exciting to people anymore,” he added.<\/p>\n<\/div>\n<\/p>\n

See the original article here:
\nNintendo shares plunge after loss<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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