Wii to win war of the consoles
Video games veteran Nintendo, which makes the immensely popular Wii console, looks set to replace Sony as the king of the video game world, posting a 31.5 per cent increase in first quarter profits.
Sales of the Wii console, which has a motion-sensing controller that can be swung like a bat, rose by 51 per cent to 5.17m, outselling Sony’s PlayStation3 by three times and comfortably beating Microsoft’s Xbox 360.
Nintendo forecasts that sales of its Wii will rise by 34 per cent this year, meaning it will have sold more machines than Sony for the first time in 13 years.
Operating profit increased by 31.5 per cent to ¥119.2bn (£557m) as revenue rose 24.4 per cent to ¥423.4bn. Although a strong performance, it was not as impressive as the five-fold surge in profit it reported a year ago, suggesting the craze around the machine’s 2006 launch is beginning to taper off.
Despite the robust performance, Nintendo remained cautious, keeping its operating profit forecast for the full year at ¥530bn, below market expectations of around ¥596.1bn.
Unlike Microsoft and Sony, who invested huge sums in new technology for their “seventh generation” consoles, Nintendo’s cheaper machine is relatively unsophisticated.
The motion sensor fitted on the Wii costs just £5, allowing Nintendo to keep retail prices low while making a profit on every unit. Conversely, Microsoft and Sony make a loss on machine sales, which they recoup through game sales.