Nintendo Expects Own Software Development to Help Revive Wii U

Nintendo Co., the world’s biggest maker of video-game machines, plans to revive demand for its Wii U through the release of its own new titles as sales of the console failed to meet forecasts amid a lack of software.

Building sales momentum will also make it more appealing for other studios to produce content, President Satoru Iwata told the annual shareholder meeting yesterday, according to an e-mailed statement. There is no plan to cut jobs, the Kyoto, Japan-based company said.

Iwata is trying to bolster earnings with titles including “Wii Fit U” for the home console and “Animal Crossing: New Leaf” for the 3DS handheld player amid a shift in gaming to smartphones and tablets. Nintendo faces new competition for the Wii U, which posted sales 37 percent below initial forecasts, as Microsoft Corp. (MSFT) and Sony Corp. (6758) both plan to release new machines for the Christmas shopping season.

“The only way to improve earnings is to sell good software titles,” said Masao Katsuura, an individual investor who attended the meeting in Kyoto yesterday. “I’m worried whether the company can release games as it plans.”

Media were not permitted to monitor the meeting at the company’s headquarters.

Photographer: Scott Eells/Bloomberg

Customers play Nintendo Co. Wii U video games inside a Nintendo World store in New York. Close

Customers play Nintendo Co. Wii U video games inside a Nintendo World store in New York.

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Photographer: Scott Eells/Bloomberg

Customers play Nintendo Co. Wii U video games inside a Nintendo World store in New York.

Nintendo fell 0.4 percent to 10,940 yen at the close of Osaka trading yesterday, paring this year’s gain to 19 percent.

Forecast Affirmed

Iwata reiterated his January pledge for operating profit of 100 billion yen ($1 billion) in the year ending March, the company said. That compares with the 75.8 billion-yen average of 21 analyst estimates compiled by Bloomberg.

The forecast is based on an exchange rate of 90 yen against the dollar and 120 yen to the euro, or weaker, Iwata said. The U.S. dollar was worth 97.96 yen as of 3:36 p.m. in Tokyo.

Sales of the Wii U, introduced in November, totaled 3.45 million in the financial year ended March. That compares with a 4 million-unit target set in January and an initial projection of 5.5 million. Nintendo, which attributed a lack of titles for lower than expected sales, plans to sell 9 million of the consoles in the current business year.

The creator of Super Mario, Zelda and Donkey Kong characters targets sales of 18 million units of the 3DS this financial year, up 29 percent from last year. The handheld player edged out Microsoft as the top-selling platform in the U.S. in May, Port Washington, New York-based NPD Group Inc. said June 17. “Donkey Kong Country Returns 3D” and “Luigi’s Mansion: Dark Moon” helped increase Nintendo’s software sales, the company said.

Competing Consoles

The Wii U, priced starting at $300, features a 6.2-inch touchscreen controller that lets users wirelessly connect to the console and shift the display between the device and a TV. It is the industry’s first new home-gaming console since 2006, the year Nintendo released its predecessor, the Wii.

Sony’s PlayStation 4, which surged to the top of pre-orders on Amazon.com Inc.’s online shop after it unveiled the model earlier this month, will start from $399 when it is released in the U.S. later this year, boasting sharper graphics.

While Microsoft’s Xbox One will have a price tag of $499, it includes improved Kinect voice commands and motion sensing, content partnerships with the National Football League and access to Skype video calls. The next version of “Halo,” Microsoft’s top-selling science-fiction game that anchored the previous Xbox, will arrive in 2014, the company said this month.

To contact the reporters on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net; Takashi Amano in Tokyo at tamano6@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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