Nintendo outruns its rivals: Mario's creator bucks Japanese trend by lifting profits more than 2%

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The Independent Online
WITH a little help from the moustachioed Mario, Nintendo, the Japanese video game group, has bucked the trend of falling Japanese profits.

But the weakness of the dollar is a growing problem for the group, which plans to push up the price of its US games by more than 20 per cent to around dollars 60 (pounds 39) this summer, a move expected to harm exports.

Nintendo's net profits rose 2.2 per cent in the year to 31 March, reaching Y87bn (pounds 510m) - more than double those of Matsushita and Sony, the giant consumer electronics groups.

Sales, at Y562bn, were still much smaller than either rival's, but showed an impressive 10 per cent increase on the previous year. Nintendo yesterday attributed its sales performance to strong US and European sales of software such as the million-selling Mariocart, Mario Paint and Star Fox games for its Super NES machine.

European sales have also been boosted by its decision to switch distribution, traditionally carried out by third parties, to its newly created subsidiaries in France, Britain, the Netherlands and Belgium.

Nevertheless, currency pressures and competition from its aggressive rival Sega pose increasing threats to Nintendo's comfortable position.

The group's decision to increase the price of its American games stems from a 15 per cent fall in the value of the dollar against the yen over the past year. US sales, at about dollars 1.4bn a year, account for almost a third of Nintendo's total sales, and each one yen decline in the value of the US currency cuts its profits by Y1.4bn.

Sega doubled net profits to Y28bn last year and saw sales reach almost Y350bn. It is particularly strong in Europe, where the yen's weakness has been less marked.

However, in the current year Nintendo expects a further 3 per cent rise in net profits to around Y90bn yen on sales of about Y600bn.