Nintendo’s Earnings Fall

Despite higher sales for the year, a weaker dollar cut net income in half at Nintendo Co., but the Japanese video game maker Thursday predicted a new version of its popular Game Boy would fuel growth in the year ahead.

Nintendo said profit for the fiscal year that ended March 31 sank to 33.19 billion yen -- about $296 million, based on the average exchange rate for the year. That’s down from 67.27 billion yen, or $600 million, last year.

Sales rose 2% to 514.8 billion yen, or $4.49 billion.

Nintendo’s bottom line was hit by foreign exchange fluctuations. The company keeps a large share of its foreign earnings in those markets to take advantage of higher interest rates than in Japan. Nintendo said a weaker dollar led to a 67.8-billion-yen loss on its foreign currency assets.

“This is a company with a ton of cash,” said analyst Michael Pachter, who covers the video game industry for Wedbush Morgan Securities. “They had a currency translation problem.”

Pachter was encouraged that the company announced it was aiming to launch its new portable device -- the DS, which stands for dual screen -- in North America and Japan by the end of 2004.

“They are predicting they will sell 3.5 million of the DS,” Pachter said. “That’s not only important for them, it will also boost companies that make games for the platform.”

Nintendo said that in the year ahead it expected net income to grow to 70 billion yen as sales climb 3%. The estimate assumes the dollar will average 105 yen.

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Associated Press was used in compiling this report.