The Mouse That Roared
The widely unexpected success of Nintendo's modest little Wii game console has put them back on the map. And unlike the powerful and expensive PS3 and X-Box 360, the Wii has made money for its makers right out of the gate:
Today, the company increased its earnings forecast for fiscal year 2007 by 20 percent. The new guidance points to net income of 120 billion yen (about $1 billion) and 900 billion yen ($7.6 billion) of revenues. Last year, Nintendo managed profits of 98 billion yen, or $830 million, on 509 billion Yen ($4.3 billion) in net sales.
Margins won't look as good as last year's, as sales are growing faster than profits. But that's to be expected with the rollout of the Wii system. Nintendo is reportedly making a profit on each unit sold, but compared to the mature DS unit with a couple of years of process improvements under its belt, the Wii carries much thinner margins.
