Nintendo profit hit by strong yen

The electronics company’s first-quarter loss was larger than analysts had expected.

Analysts say the first-quarter results aren’t crucial in determining Nintendo’s overall financial condition. Picture: AP Photo/Shizuo Kambayashi.

Nintendo on Wednesday reported a net loss of Y24.5 billion ($US234.2 million) during the first fiscal quarter due to sluggish sales of video game consoles and a strong yen.

The loss for the April-June quarter was larger than an Y11.2 billion loss expected by analysts on average, according to data provider Quick. That compares with the Y8.28 billion Nintendo booked in the same period last year.

The loss was partly due to the yen, which strengthened sharply in the latest quarter. Nintendo holds large cash holdings in US dollars and euros.

The Kyoto-based company’s operating loss, which excludes the exchange-rate effect, stood at Y5.1 billion, compared with analysts’ expectations for a Y4.2 billion loss. It gained Y1.15 billion in the same period a year ago.

Analysts say the first-quarter results aren’t crucial in determining Nintendo’s overall financial condition, especially this year, because the company is scaling back its flagship Wii U console business ahead of a planned launch in March of its NX next-generation console. It also plans to release four more smartphone titles by March, starting with those featuring its popular franchises, “Fire Emblem” and “Animal Crossing,” in autumn.

“Pokémon Go,” a wildly popular smartphone game that indirectly benefits the company, became available in July. Its contribution, therefore, isn’t reflected in the first quarter.

Yet Nintendo told investors it has already factored any positive effects from the game into its financial guidance for the fiscal year ending March, noting that the contribution would be limited.

— Dow Jones newswires