Nintendo logs $132 million first-half net profit

TOKYO - Japanese videogame giant Nintendo said Wednesday its first-half net profit soared to $132 million as a sharply weaker yen boosted its bottom line and offset slowing sales.

The Kyoto-based company earned 14.3 billion yen between April and September, way up from 600 million yen a year ago, despite sales falling 12.8 percent to 171.4 billion yen on lacklustre demand for its 3DS games system.

Nintendo kept its full-year 20 billion yen profit forecast unchanged, and said its operating loss in the first half shrank to 215 million yen, from 23.3 billion yen a year earlier.

Demand for Nintendo's Wii U console, which lagged the success of its predecessor, was picking up ahead of the key holiday sales season.

The relatively upbeat results come as Nintendo looks to move past three straight year of operating losses, underscoring the challenges faced by the one-time industry titan.

Earlier this year, company president Satoru Iwata said he would slash his salary in half for five months to atone for the downturn.

The maker of the Super Mario and Pokemon franchises has struggled as rivals Sony and Microsoft outpaced it in console sales.

All three companies are also fighting off a trend toward cheap -- or sometimes free -- downloadable games for smartphones and other mobile devices.

Nintendo has been criticised for its longstanding refusal to license some of its iconic brands for use on mobile applications.

New games

But Nomura Securities analyst Junko Yamamura said that, while Nintendo was likely to move toward cloud gaming and integration of game platforms, it was smart to hold off for now.

"We expect Nintendo to continue to struggle in the short term, but think management has made the right decisions," she said in a recent report.

"We are opposed to Nintendo engaging in a billing-based business by sharing its own content with smartphone apps. Unlike (other game products) that are mainly used by older people, Nintendo's main users are children."

Yamamura added that Nintendo has little experience in mobile billing.

"Developing characters that it has carefully nurtured over many years in paid-for apps would likely boost earnings in the near term, but we see a stronger risk of the brand being damaged in the long term," she said.

On Wednesday, Nintendo said sales of its Wii U system were picking up, largely thanks to the global release in May of its "Mario Kart 8" game.

As the Christmas shopping season draws near, the company highlighted a planned release of "Super Smash Bros." for Wii U in the US in next month and in Japan and Europe in December.

"It is the first year-end sales season for Wii U in which two big Nintendo titles will be available," Nintendo said.

But the firm conceded that demand for its handheld 3DS console slowed "due to a lack of strong titles especially in Japan."

Nintendo said it sold 1.12 million Wii U consoles in the first half, well up from 460,000 in the same period a year ago.

Sales of the 3DS came in 2.09 million units, down sharply from 3.89 million units sold in the same period a year ago.

Nintendo largely credited a sharp drop in the value of the yen for its improved profit.

A weaker yen helps make Japanese exporters more competitive overseas and inflates the value of their repatriated profits.