Nintendo cuts full-year revenue forecast by 21.4%

It has been a day dominated by Nintendo, with the Japanese publisher announcing a launch date and price for the 3DS in Japan, confirming the Wii Remote Plus, and offering first word on its 3D television plans. However, it hasn't been all positive news out of the publisher today, as Nintendo also said that it has dramatically scaled back its earnings forecast for its half and full fiscal year.

For its fiscal half year ending September 30, Nintendo now expects revenues of ¥360 billion ($4.31 billion), down 34.5 percent from its previous projections of ¥550 billion ($6.58 billion). Having previously forecast a ¥70 billion ($837 million) profit during the period, the publisher now expects to be in the red during the six-month period, with a net loss of ¥2 billion ($23.9 million) now projected. In 2009, Nintendo earned ¥64.5 billion ($771 million) on net revenues of ¥548 billion ($6.55 billion).

Nintendo expects to make up some of that ground, but not all of it, during the back half of its fiscal year. For its full fiscal year ending March 31, 2011, Nintendo now forecasts revenue of ¥1.1 trillion ($13.2 billion), down 21.4 percent from previous estimates of ¥1.4 trillion ($16.7 billion). Those initial revenue projections were already below its previous-year earnings of ¥1.434 trillion ($17.1 billion).

Despite the revenue shortfall, Nintendo still expects to post a substantial profit this year. Having previously anticipated net income of ¥200 billion ($2.39 billion), the publisher now expects profits to slide 55 percent to ¥90 billion ($1.08 billion). During its previous fiscal year, Nintendo turned a ¥228.6 billion ($2.73 billion) profit.

Nintendo attributed the sizable earnings revision to a number of reasons, including a stronger-than-expected appreciation of the yen, the industry-wide sales outlook for the holiday season, and the "decided release conditions" for the DS.

Of course, the Wii's and DS's anemic sales performance is also a contributing factor. Nintendo now expects to sell 23.5 million DS hardware units and 125 million DS software units during the in-progress fiscal year, down from initial estimates of 30 million systems and 150 million titles.

Likewise, Nintendo is now projecting Wii hardware sales of 17.5 million and software to move 135 million units, a drop from its previous forecast of 18 million machines and 165 million games.