Nintendo drastically slashes profit forecast due to strengthening yen and disappointing 3DS sales

 
Joe Hall
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Pika-boo: Nintendo shocked investors with a large profit warning (Source: Getty)

Nintendo has drastically slashed its profit forecast for the fiscal year ending next month, with a strengthening of the yen weighing on the Japanese video games manufacturer.

Net profit estimates were trimmed from 35bn yen (£200.4m) to 17bn yen as its forecast sales were decreased by 70bn yen to 500bn yen.

Nintendo's disappointing sales performance was primarily down to worse than expected demand for its portable 3DS console as the Wii and Wii U met company expectations.

But the creator of iconic games such as Pokemon, Super Mario Brothers and the Legend of Zelda cited a growth in the yen's value - the currency has risen by about 10 per cent against the dollar since December - which has put pressure on Japanese stocks as the reason for the profit warning.

In a statement Nintendo said:

Based on the sales performance for the nine months ended December 31, 2015 and after the beginning of the new calendar year, as well as considering recent trends of yen appreciation in foreign currency exchanges, we have modified our financial forecast.

Nintendo Nintendo | mobile image

However, despite the warning the firm said its annual dividend forecast would remain at 150 yen.

The profit warning does not bode well for Nintendo ahead of what is a big year for the company as it rolls out its first games specifically designed for smartphones and the new NX console.

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