* Forecasts FY op profit 50 bln yen, ahead of market view
* Lower costs offset shrinking revenue last FY
* To release smartphone app this year
(Adds company comment, smartphone context, console forecasts,
TOKYO, May 7 (Reuters) – Japanese videogame maker Nintendo
Co Ltd on Thursday forecast annual operating profit to
double in the year through March, with its entry into smartphone
games widely expected to help make up for weak sales growth of
its traditional consoles.
Nintendo’s latest Wii U console has been a distant third to
Sony Corp’s PlayStation and Microsoft Corp’s
XBox, while the rise of smartphone games has also led to a
decline in customers.
The firm repeatedly resisted investor calls to branch out to
mobile to boost profitability. But in March, it partnered DeNA
Co Ltd to develop and operate game apps that the latter
hopes to bring in over 3 billion yen ($25 million) a month.
DeNA last month said the pair would release their first game
later this year.
“A new source of revenue is expected from a gaming
application for smart devices which will be released this year,”
Nintendo said in an earnings release, while it did not announce
any new details of the DeNA partnership.
For the year from April 1, Nintendo forecast operating
profit would roughly double to 50 billion yen in the year
through next March, ahead of the 39 billion yen average forecast
of 20 analysts to Thomson Reuters data.
It booked an operating profit of 24.8 billion yen for the
previous year, turning to black for the first time in four years
as lower costs cancelled out the effect of weaker revenue.
The company said new software titles would likely help
bolster sales of the Wii U and portable 3DS in the year ahead.
But it forecast Wii U sales this year to be roughly flat at
around 3.4 million consoles, with those of the 3DS likely to
fall to 7.6 million from 8.7 million a year earlier.
Shares of Nintendo closed 2.5 percent lower ahead of the
earnings release, versus a 1.2 percent fall in the broader
($1 = 119.4600 yen)
(Reporting by Ritsuko Ando; Editing by Christopher Cushing)