Nintendo sales down, but profit still climbs

Gamers may have had plenty of Nintendo news to soak up in the recent weeks, but investors want to know one thing--is Nintendo making money? The company answered that question today when it released its results for its recent fiscal year.

For the full year ending March 31, 2006, the company saw a decline of 1.2 percent in total revenues compared to the previous year. The revenue tally for the year was 509.25 billion yen ($4.5 billion).

Due to foreign exchange gains and interest income, however, the company increased its recurring profits by 10.6 percent over last year and saw a 12.5 percent gain in net profit compared with the year before. Net profit for the past year was 98.38 billion yen, or $873 million.

"They basically have a very stable and growing handheld business and it looks like for the first time in 10 years they will actually have a successful console business," Hiroshi Kamide, a game analyst for KBC Securities Japan, told Reuters.

Owners of Nintendo stock made out well, according to Nintendo. It announced the highest annual dividend in Nintendo's history, 390 yen per share ($3.48).

Despite the surge in popularity--and sales--of the Nintendo DS, it fell short of making up for the lack of sales generated by the GameCube and Game Boy Advance. In addition, increased research and development costs for both the DS and Wii dragged down operating profit.

Nintendo is counting on the continued success of its DS handheld and a successful launch of the Wii to increase its worldwide sales by 18 percent this fiscal year, the company said.

In announcing other Wii details, Nintendo added its plans to ship 6 million consoles at launch around the world before the end of its current fiscal year, which ends March 31, 2007. The company is also projecting that 16 million DS handhelds will ship during the current fiscal year.