Price cut for Wii? Forgetaboutit!
With Nintendo's earnings through the roof, rumors of a Wii price cut have started surfacing. Ninny's reply? "LOL."
Here's the Associated Press article:
TOKYO - Fresh off bumper earnings, Nintendo Co. ruled out a price cut for its smash-hit Wii video game console Friday and announced the company will being selling the Wii in China next year.
Nintendo President Satoru Iwata also unveiled a gift-giving feature that will allow users to send each other games over the Internet, boosting the Wii's network offerings.
Profits at Nintendo have surged on the runaway success of the Wii and the portable Nintendo DS machine in North America, Europe and Japan, forcing Sony and Microsoft to slash console prices in a desperate catch-up bid ahead of the holiday season.
Iwata said the company was struggling to meet demand of the Wii and a price cut was out of the question. The Wii sells for $249.99 in North America, 249 euros in Europe and 25,000 yen in Japan — all less than Sony's PlayStation 3 or Microsoft's XBox 360.
"We're still focusing on how to meet booming demand," Iwata said Friday. "We're absolutely not considering a price cut." He said Nintendo was ramping out 1.8 million Wii consoles per month but that a supply crunch was inevitable during the Christmas sales.
Nintendo's confidence ahead of the critical Christmas shopping season reflects the Wii's strength in a three-way battle of current generation video game consoles against the PS3 and Xbox 360, as well as the continued popularity of the handheld DS console.
The maker of Pokemon and Super Mario games has chosen a different strategy from Sony and Microsoft, wooing novices with low-cost and user-friendly machines unlike the more expensive consoles of its rivals.
With its wandlike remote control for fishing, golfing, tennis and other video games, Nintendo's Wii console has won over fans from young children to rehab patients.
Sony's top-line PlayStation model, with an 80 gigabyte hard drive, now costs $499 in the U.S., down from $599. A new low-end model with a 40-gigabyte drive will go on sale Nov. 2 for $399.
Microsoft's Xbox 360 costs $350 in the United States.
The company has also won a following for the DS console — which stands for "dual screen" — with a lineup of low-cost, casual software like "Nintendogs," "Brain Age" and "Nintendo Cooking."
Nintendo shipped about 3.9 million Wii units around the world in the last three months, bringing the total since its launch last year to 13.2 million units. The company has sold 53.6 million DS consoles.
Iwata said it was banking on the "Wii Fit" game due out later this year in Japan to buoy future sales. The game allows players to weigh themselves, check their balance and play fitness games like yoga, hula hoops and ski jumping.
Nintendo also unveiled a function Friday that allows users to send each other games over the Internet using the Wii's shopping channel.
With a few clicks, a user will be able to select a game to send as a gift to another user online, Iwata said. When the recipient accepts, the Wii automatically launches the shopping channel and begins the download.
"We think this will be a breakthrough in encouraging customers to spread news of fun games word of mouth," Iwata said. "We also hope to spur more users to connect their Wiis to the Internet," he said.
Looking ahead, Iwata said the company would start selling Wiis in China next year, opening up a previously untapped market for the Kyoto-based company.
"We barely have enough Wiis to meet global demand this year. But next year, we can bring the Wii to China," Iwata said.
Nintendo still needed to work with Chinese games developers to craft games suited to the market there, Iwata said.
He declined to give a sales target, but said Nintendo's "future potential there is huge."
Strong earnings for Microsoft
Master Chief can enjoy some R & R, based on the latest Microsoft earnings report.
Here's the AP story:
SEATTLE - After Microsoft Corp. executives laid out plans in July to win at Web search, online advertising, Web-based software and video games, analysts wondered if the world's largest software maker had too many balls in the air. Microsoft's answer, in the form of its fiscal first-quarter results announced Thursday, was a resounding "no."
Microsoft said its profit soared 23 percent to $4.29 billion, or 45 cents per share, from $3.48 billion, or 35 cents per share, during the same period last year, as brisk sales of the new "Halo 3" video game, Windows and Office helped it breeze past Wall Street's expectations.
Investors sent Microsoft shares up 11 percent to $35.66 in after-hours electronic trading.
Analysts, on average, had forecast a profit of 39 cents per share, according to a Thomson Financial poll.
Revenue for the period ended Sept. 30 grew 27 percent to $13.76 billion from $10.81 billion last year, beating analysts' forecast by more than $1 billion.
"It's a very good report," said McAdams Wright Ragen analyst Sid Parakh. "I think people are going to revisit how they look at Microsoft. So far they've been viewing it as value stock. Going forward, they'll think about it as a growth stock."
Microsoft sold 88 million copies of Windows Vista since the operating system went on sale in January — 28 million since the end of July — according to Colleen Healy, general manager of investor relations for Microsoft.
The division responsible for Vista contributed $4.14 billion in revenue in the quarter, 25 percent more than a year ago. Microsoft booked 27 percent more annual license agreements for Windows than in the year-ago quarter, a sign businesses are committed to following Microsoft into the Vista era.
Sales from the unit that makes the Office 2007 software suite rose 20 percent to $4.11 billion.
Robust PC sales worldwide boosted both operating system and Office sales, but Healy said those divisions also benefited from customers choosing higher-priced premium versions of Vista.
Sales of "Halo 3" and the Xbox 360 consoles it is played on pushed the company's entertainment and devices division to a profit of $165 million in the quarter — the Xbox division's second time ever in the black. The unit's revenue nearly doubled from a year ago to $1.93 billion, including $330 million from "Halo 3." Microsoft sold 1.8 million Xbox 360 consoles in the quarter.
But in the crucial holiday shopping quarter, Microsoft isn't expecting spectacular growth for this division, which also recently launched a new line of Zune digital media players.
Chief Financial Officer Chris Liddell forecast in a conference call Thursday that the division's revenue would be flat to down 8 percent from last year.
Walter Pritchard, an analyst at Cowen and Co., said Microsoft was "probably being a little conservative," leaving room for a drop in consumer spending.
The analyst also said Microsoft shipped more Xbox 360s to retailers than they could sell last year, whereas this year, retailers were already stocking up in the first quarter, making year-over-year comparisons uneven. Microsoft also cut Xbox prices in August.
The division responsible for online advertising was the one laggard in the quarter, posting a loss of $264 million, hurt by the company's acquisition of aQuantive and by heavy investments in Web search and data centers.
"This is a competitive space," Healy said. "If you want to play right now, you're in investment mode."
Without an $80 million contribution from aQuantive's, Microsoft's ad revenue would have improved 25 percent.
Microsoft raised guidance for the year, saying it expected to earn $1.78 to $1.81 per share on revenue of $58.8 billion to $59.7 billion. Earlier, the company predicted earnings of $1.69 to $1.73 per share on $56.8 billion to $57.8 billion in sales.
Shares of Microsoft gained 74 cents, or 2.4 percent, in regular trading Thursday to close at $31.99, above its 52-week high of $31.84.
Electronic sales boost video game losses for Sony
Despite Sony's gains in electronics, their video game division is taking a major thumping.
Here's the AP story:
TOKYO - A recovery in electronics sales offset losses in video games and helped boost Sony's profit for the July-to-September quarter more than 40-fold over the same period a year ago.
Sony Corp. saw $646.7 million in group net profit for the second quarter — or 73.72 yen, up from 1.68 billion yen in last year's second quarter. Quarterly sales jumped 12.3 percent to $18.27 billion.
For the fiscal half overall, Sony posted a $1.23 billion profit, about three times a year earlier. First half sales climbed 12.8 percent to $35.61 billion.
The major sore spot in Sony's results was in its game unit, where red ink worsened from a year earlier, partly because of losses related to its PlayStation 3 home console. The machine has been struggling against Nintendo's Wii.
Sony shares dipped 1.4 percent to $45 shortly before earnings were announced Thursday.
Sony, the entertainment and electronics company behind Walkman portable players and "Spider-Man" movies, has been restructuring in recent years to regain profitability in its core electronics operations, which includes televisions and digital cameras.
Those efforts appeared to be bearing fruit as sales in electronics jumped 20.7 percent and profit in the division surged about 13 times to nearly $939,000.
The Japanese electronics maker also reversed fortunes in its film unit, returning it to the black for the second quarter with the box office success, "Superbad," and cuts in marketing costs.
Sales in the gaming unit rose 42.9 percent, boosted by sales of the PlayStation 3, which hit stores last year. But losses in that division deepened to $848.2 million as Sony continued to sell the games for less than it cost to produce them. Sony hopes the unit will be profitable by the fiscal year ending March 2009, said Chief Financial Officer Nobuyuki Oneda.
The company sold 1.3 million PS3s during the second quarter for a total of 5.6 million so far worldwide.
In contrast, Nintendo said Thursday that it has sold 13.2 million units worldwide of the Wii, which launched about the same time as the PS3.
Sony raised its forecast for the full fiscal year, which ends March 31, to $2.89 billion from the earlier projection of $2.81 billion.
Its computer chip business has seen healthy demand; the chips are used in personal computers, digital cameras and the PS3.
Sony has been banking on a resurgence in its TV business, where it fell behind rivals in flat-panel TVs. It now makes them jointly with Samsung Electronics Co. of South Korea. But it booked a slight loss from its liquid-crystal display venture with Samsung and acknowledged its TV operations were in the red for the fiscal first half.
The company recently showed a superthin TV — just 0.12 inches thick — whose display uses a different technology called organic light-emitting diode that President Ryoji Chubachi said symbolizes Sony's big comeback.
The $1,750 XEL-1, which has an 11-inch screen, goes on sale Dec. 1 in Japan. Plans for overseas sales are undecided. Production is set for 2,000 units a month.
Both profit and sales were down in Sony's financial unit, which includes an online bank and insurers. But profit from equity Sony holds in affiliates, including cell maker Sony Ericsson Mobile Communications AB, edged up slightly from a year ago, and losses declined at Sony BMG Music Entertainment, which Sony runs with Bertelsmann AG.
Best-selling albums during the quarter included Bruce Springsteen's "Magic" and Foo Fighters' "Echoes, Silence, Patience & Grace."