Nintendo mobile partner DeNA books $450 million writedown as gaming business falters

FILE PHOTO: Japanese gaming firm DeNA Co said on Wednesday it was booking a 49.4 billion yen ($450 million) writedown as its gaming business falters in Japan's saturated mobile market. REUTERS/Yuriko Nakao/File Photo

TOKYO (Reuters) - Nintendo Co Ltd’s mobile partner DeNA Co Ltd said on Wednesday it was booking a 49.4 billion yen ($450 million) writedown as its gaming business falters in Japan’s saturated mobile market.

DeNA booked a 40.2 billion yen loss on goodwill related to U.S. gaming unit Ngmoco and a 8.1 billion yen loss on software, with the company saying it expects to report a loss in the year ending March.

DeNA has partnered with Kyoto-based Nintendo on mobile titles including Mario Kart Tour, which has been widely downloaded since its September launch. But it has yet to become a big revenue driver as it was not offered with a multiplayer option from the outset.

Another title, Pokemon Masters, which was developed in partnership with Nintendo-backed The Pokemon Company, has not lived up to expectations.

Given DeNA’s mobile titles already include high profile franchises like Pokemon and Animal Crossing, it is hard to see how the company will reenergize its gaming business, said Serkan Toto, founder of game industry consultancy Kantan Games.

The results comes as analysts question partner Nintendo’s commitment to mobile, which remains a small contributor to overall sales despite the company’s pledges to expand beyond its core business centered on the Switch console.

With Japan’s mobile market increasingly centered on a small number of hit titles, gaming companies are closely guarding their title pipelines, creating difficulties for investors in gauging their prospects.

One runaway hit is Dragon Quest Walk, from Square Enix Holdings Co Ltd and Colopl Inc, which offers Pokemon Go-style outdoor play and has proved wildly popular since its September launch.

Reporting by Sam Nussey; Editing by Kim Coghill