Nintendo turns a billion dollar profit, and is happy to be number 3

Nintendo Raises Profit Forecast 20% on DS Game Sales

Speaking of profit vs. market share:

Jan. 10 (Bloomberg) -- Nintendo Co., the world's biggest maker of handheld game players, raised its full-year profit forecast by 20 percent on sales of DS portable devices and increased targets for Wii games.
Net income will rise to 120 billion yen ($1 billion) for the year to March 31, compared with an October estimate for 100 billion yen, the Kyoto-based company said in a statement today. Nintendo reported 98.4 billion yen profit a year earlier.
Nintendo's two-year-old touch-screen DS player is driving sales of Super Mario games and newer titles such as Nintendogs. The company is also making inroads in home consoles after it sold twice as many Wii players as Sony Corp.'s PlayStation 3 in Japan last year, said Enterbrain Inc., a Tokyo-based research firm.
``Nintendo is going like gangbusters, and the Wii consoles are selling like hotcakes,'' said Edwin Merner, who oversees $1 billion as president of Atlantis Investment Research Corp. in Tokyo. ``They have momentum, and I think you can expect them to surpass earnings estimates for the next year or two.''
Sales this year will probably rise to 900 billion yen, compared with a 740 billion yen forecast in October and 509.2 billion yen a year earlier, the company said. Nintendo also raised it full-year dividend forecast to 480 yen, from the October estimate of 400 yen and 390 yen a year earlier.
Nintendo shares climbed 2.4 percent to 29,150 yen as of the 3 p.m. close on the Tokyo Stock Exchange. The stock more than doubled in value last year, becoming the Topix index's third-best performing stock.

What a bold strategy: make the Wii and the DS a game that's fun, market it based on how fun it is, and sell each unit at a profit. Contrast that with Microsoft and Sony's plan: build a cutting edge platform that pushes the technological boundaries, market it based on how cutting edge it is, and lose your ass on every unit you sell.

With a billion dollars net income on about seven billion in revenue, I think even ex-GE CEO Jack Welch might have been happy with being number three in the market.

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