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Japan-Update

Nintendo sees full-year net profit soaring on soft yen

Overhaul of game operations still a work in progress

Consumers try out Nintendo's Switch at an event in Tokyo on Jan. 14.

OSAKA -- Nintendo raised its net profit forecast Tuesday to 90 billion yen ($798 million) for the year ending March 31, up 445% from the previous year and the highest in seven years, thanks chiefly to the Japanese currency's weakening in recent months.

The Kyoto-based video game icon previously projected 50 billion yen in black ink. But now, the softer yen is seen lifting the value of foreign-currency-denominated assets in yen terms.

Nintendo is assuming exchange rates of 110 yen to the dollar and 120 yen to the euro, compared with 100 and 115 before. The annual dividend will rise 230 yen from last fiscal year to 380 yen per share.

That said, the company is still only halfway toward restoring game operations to glory.

Nintendo President Tatsumi Kimishima announces company earnings in Osaka.

Its new operating profit forecast of 20 billion yen marks a 10 billion yen downgrade and a 39% year-on-year plunge. The latest "Pokemon" games became big hits in the October-December quarter. And Nintendo 3DS handheld systems sold briskly.

But online game distribution did not fare well. Neither did sales of such high-margin offerings as game character figures.

Nintendo launched the "Super Mario Run" smartphone game in December, with downloads totaling some 78 million by Tuesday. Yet paying users have not reached the targeted double-digit percentage, President Tatsumi Kimishima told a news conference here, indicating that the company will work on improvements. Players have complained of scanty content available for free.

Sales shrank 27% to 311.1 billion yen for the nine months ended Dec. 31, while net profit rose 150% to 102.9 billion yen. The company expects a January-March operating loss as it spends heavily to sell its latest game system, the Switch.

(Nikkei)

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