Nintendo says Wii, DS sales strong

KYOTO, Japan Mon Dec 8, 2008 12:41pm EST

1 of 2. Nintendo Co Ltd's President Satoru Iwata speaks during an interview with Reuters at the company's headquaters in Kyoto, western Japan December 8, 2008.

Credit: Reuters/Issei Kato

KYOTO, Japan (Reuters) - Nintendo Co Ltd said sales of its Wii game console more than doubled during the week of Thanksgiving in the United States, apparently defying the retail gloom of the global economic crisis.

President Satoru Iwata told Reuters in an interview that Wii sales more than doubled to about 800,000 units during the week of Thanksgiving, from about 350,000 units a year earlier.

While Iwata did not give specific dates, he said the sales were measured over a seven-day period that included both Thanksgiving and the so-called Black Friday for U.S. retailers, which is the traditional start of the holiday shopping season and when retailers rack up their biggest sales of the year.

"Fortunately for us a lot of shoppers put our products at the top of their list," Iwata said on Monday.

He said sales of its DS handheld game player were up about 20 percent year-on-year during the holiday period. European Wii sales so far this holiday season have outstripped last year's, he said.

"We are shooting for quite big numbers as our annual (unit) sales targets. But we are not in a situation where it is getting difficult to hit that target or our plans are getting off track," Iwata said.

Nintendo, locked in a three-way battle with Sony Corp and Microsoft Corp in the global video game industry, aims to sell 27.5 million units of the Wii in the year to end-March, up 48 percent from a year earlier.

Since 2002, Iwata has focused on expanding the overall gaming population by launching game machines and software like the 'Wii Fit' home exercise game, rather than competing head-on with Sony and Microsoft in enhancing the speed and power of game consoles.

That strategy appears to have paid off handsomely as the Wii is outselling Sony's PlayStation 3 and Microsoft's Xbox 360 by a large margin, allowing Nintendo to forecast an operating profit more than three times as big as Sony's.

"When similar products are on store shelves, price competition is inevitable. Nintendo has been trying to steer clear of that direction and create a market of our own," Iwata said. "Our effort in the past is now bearing fruit."

NOT OUT OF STEAM

Worldwide Wii sales came to 34.6 million units at end-September, against about 16.8 million for the PlayStation 3 and about 22.5 million for Microsoft Corp's Xbox 360.

"The competition stage is over," Nomura Securities analyst Yuta Sakurai said. "The spread on shipment volumes is so large that it's not even worth talking about it. They aren't rivals."

For a graphic on hardware sales by Nintendo and its rivals, click here

Iwata said people tended to pick video games even when their budget was tight as they were affordable.

Arvind Bhatia, senior vice president and director of equity research at Sterne Agee, agrees.

"In general, the video game sector continues to outperform most, if not all, forms of entertainment, in our opinion. Within that, Nintendo's Wii remains particularly hot."

Nintendo's rapid expansion in recent years has made it Japan's fifth-most valuable company, but some analysts have said the game maker's prolonged and steep growth may be about to lose steam, citing slower DS sales in Japan in the first half of the current business year, which started in April.

Iwata, however, sees growth potential overseas.

"When you compare Japan with the United States, the number of game players are different, and the population is different in the first place," he said.

"If you think about that, enormous growth potential is left for us. Further growth in our software and hardware business is quite possible."

Prior to Iwata's comments, shares in Nintendo closed up 4.9 percent at 32,350 yen, underperforming the Nikkei average, which gained 5.2 percent.

For a graphic on the share price performance of Nintendo and its rivals, click here

(For newsmaker on Nintendo president, click on

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(Additional reporting by Nathan Layne, Tarmo Virki)

(Editing by Jean Yoon and Andrew Macdonald)

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