Japan's Nintendo nearly tripled its first-half profit and boosted its annual earnings outlook Thursday on the popularity of its Wii and DS game machines.
Offering quirky, easy-to-learn games and breaking new ground with
Kyoto-based Nintendo raised its operating profit forecast for the year to March to a record $3.7 billion (420 billion yen), in line with analyst expectations, and up from an earlier estimate of $3.2 billion.
The revised forecast--its second upward revision this year--is 86 percent above the previous year's result and follows an increase in first-half profit to $1.7 billion.
Demand for the Wii has been strong since its launch late last year, easily outpacing Sony's PlayStation 3, although Microsoft's Xbox 360 has gained ground on its alien shooting game Halo 3.
Nintendo is also seeing growing support from software publishers and raised its annual software sales goal by 35 percent to 97 million units.
"It's the Wii software that we are most positive about," said Hiroshi Kamide, an analyst at KBC Securities.
"That will be the key driver for Christmas and the fact they can be so punchy about forecasts like this just before Q3 means things must look great for their retailers and wholesalers. All in all, the upward (earnings) revision only tells half the story."
Nintendo will also launch a Wii Fit home fitness game featuring a pressure-sensitive mat that allows players to head soccer balls and imitate ski jumping.
And in a major coup, Capcom said earlier this month it will develop the latest version of its blockbuster Monster Hunter action game for the Wii.
The game had previously been developed for Sony's consoles and the switch to Nintendo has fed speculation that support for the PlayStation franchise may be slipping.
The contrast with Sony's game earnings is stark.
The electronics conglomerate, also announcing results on Thursday, said PlayStation 3 unit sales may fall slightly short of its 11 million target this business year. It does not expect its game division to turn a profit until next year.
Nintendo lifted its annual Wii sales target by 1 million units to 17.5 million.
Nintendo's Wii is the cheapest of the three game consoles, selling for $249 in the United States, and both Sony and Microsoft have
But Nintendo senior managing director Yoshihiro Mori said its rivals' price cuts would have little impact on Nintendo.
"The way people play with the Wii and the type of games people play are quite different from rival offerings. The products are quite clearly differentiated," he told a news conference. "We don't see any need to cut prices.
Nintendo has become Japan's third-most valuable company by market value.
It revised its annual net profit forecast to $2.4 billion, up 12.2 percent on its previous estimate and 58 percent higher than the previous year. Annual revenue is now expected to rise 60 percent to $13.6 billion.
