AUG. 30, 2008 • Nintendo Co. Ltd. lifted its profit forecast for the fiscal year ending March 31 from ¥530 billion ($5 billion) to ¥650 billion ($6.1 billion). The gamemaker sees total sales for the fiscal year to top ¥2 trillion.
Impact: The profit that Nintendo is now making from its game systems is exceeding its average revenue level over the past 15 years. The interesting thing to note is that Sony’s game division has rarely topped $1 billion in operating income, even at the height of the PlayStation/PlayStation 2 success. Nintendo has always been profitable, even when its hardware struggled to find a mass installed base. Now that Nintendo systems are flying off the shelf, Nintendo’s profits are almost obscene. Meanwhile, under the Sony and Microsoft hardware business model, they struggle to make money even when their systems sell.
