Nintendo's and Sony's profits sink

[MegaDrive20XX]

Nintendo reported a 78.5% decline in operating profit for Q1 2005, the operating profit fell to 3.75 billion yen ($33.35 million) from 17.47 billion yen in Q1 2004; net profit fell to 14.12 billion yen ($125.6 million) from 22.64 billion yen from Q1 2004. Nintendo blamed the decline in profit on development costs and an increase in hardware sales, which are less profitable than software. Total sales fell 14% to 70.7 billion yen.

Sony Corp. reported a net loss of 7.26 billion yen ($65 millions) for Q1 2005, comparing to 23.3 billion yen profile in Q1 2004. This is a second straight quarterly loss, due to competitions in electronic business from rivals like Samsung and Sharp. The operating loss is 15.3 billion yen for the quarter; and sales fell from 1.61 to 1.56 trillion yen. Sony cut back the sales forecast from 7.45 to 7.24 trillion yen; and cut operating profit from 160 to 30 billion yen.

http://www.the-magicbox.com/gaming.htm <--- Source

Discuss....What's going on here? What are these companies doing that is causing this?

[joshnickerson]

Just a gaming slump in Japan. Gotta expect that to happen once in a while.

[zmweasel]

Just a gaming slump in Japan. Gotta expect that to happen once in a while.

The Japanese gaming market has been in the toidey for years. Here's an article from a year ago (written by the awesome David Smith) that explains the sitch: http://www.1up.com/do/feature?cId=3133485

-- Z.

[segarocks30]

It is like when the xbox wasnt really selling like hotcakes in Japan

[Mr.FoodMonster]

Well, like they said, it could be due to hardware. They both released a pretty successful handheld, and loose money on them. To be expected.