UPDATED 13:00 EDT / OCTOBER 27 2010

Will Nintendo Need Great Expectations from a 3D Hand-Held Device?

The last peak in terms of profit for Nintendo was back in 2009, when it was reported a rise of 30.2% in operating-profit margin. That was due to the increased popularity of the gaming system Wii.

But that was a moment is history, now that Nintendo reported a halving in earnings in comparison with the same period – the first 6 months – of  last year. This is not a big surprise as there are many qualifying reasons for this drop down.

The first argument would be the global decrease in interest for hand-held DS. In addition, Nintendo darkened his own business by postponing the release of the 3D hand-held gaming system after the end of the shopping season. This was instantly reflected in a dramatic dropping off the shares by 13% in two days.

Despite the general harsh environment, Nintendo expects an annual operating profit between $2-3 million. The predicted improvement in profits will definitively be a breathing for the investors, who had historical results in 2008, counting up to $6.9 billion, with the original Wii.

To be noted, Nintendo has to play its big role with the 3D hand-held device as the competition is getting though, taking for example the Sony’s Playstation consideration for Android, or Microsoft’s gaming interest for gaining ground on the mobile market.  So far, this hasn’t been promising either, as there was little good news to report during an earnings call last month.


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