‘Pokémon Go’ success hit by yen as Nintendo warns on profits
Japanese gaming group says currency woes offset boost from success of ‘Pokémon Go’
Playing 'Pokémon Go' at the Brandenburg Gate, Berlin © AFP
3 HOURS AGO by: Kana Inagaki in Tokyo
Nintendo cut its annual operating profit forecast by one-third as the yen’s rise erased gains from the runaway success of Pokémon Go, its augmented reality mobile game.
The profit warning came as the struggling Japanese games group looks to reboot its business with the upcoming launch of its new Switch console and its long-anticipated move to unleash its popular character Mario on to smartphones.
The Kyoto-based company on Wednesday cut its operating profit forecast for the financial year through March 2017 from ¥45bn to ¥30bn ($288m), while the group’s revenue target fell from ¥500bn to ¥470bn.
Meanwhile, the $661m sale of its majority stake in the Seattle Mariners baseball team boosted Nintendo’s net profit guidance 43 per cent to ¥50bn.
Nintendo has received a boost this year by the success of Pokémon Go, but analysts have warned that the company would receive only a modest share of the game’s total revenues via its 33 per cent stake in the Pokémon Company and an estimated 5-10 per cent share of the game’s developer Niantic.
Nintendo revised its currency forecast from ¥115 against the US dollar to ¥110 for the remainder of the fiscal year, saying that foreign exchange losses of ¥39.9bn outweighed ¥12bn in gains from its investment in Pokémon Company for the first half.
Despite the downgrade, analysts said the new forecast suggested strong expectations for the release of Super Mario Run as an exclusive title for Apple’s iPhone in December. The decision was cheered by investors as underscoring Nintendo’s break away from its longstanding misgivings about mobile gaming.
“There is a clear message of recovery here,” said Tomoaki Kawasaki, an analyst at Iwai Cosmo Securities.
Tatsumi Kimishima, Nintendo’s president, said that the new guidance took into account a sales target of 2m units of Switch in its first month after the console goes on sale in March. Mr Kimishima did not disclose the price of the new handheld console, which was revealed in a three-minute video last week.
Mr Kawasaki said the initial 2m target was realistic but added: “The initial reaction to Switch was not great. The company needs to do more to explain and promote why this console is fun to play.”
Shares in Nintendo have fallen 9 per cent since last Thursday’s release of the three-minute trailer, which drew a mixed response after it moved away from its traditional focus on children and families to millennials — the same lapsed console gamers who rediscovered their childhood affection for Nintendo with Pokémon Go.


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