Nintendo Doubles Profits, Nets $2.5 Billion in Single Year

Think Nintendo can't break anymore records? Think again. According to this Forbes report, Japan's Nintendo operating profit more than doubled on strong game and hardware sales, resulting in record operating and net profits for their fiscal year ending in March. What's that translate to in dollars? Try from $2.2 to $4.7 billion in operating profit, with $2.5 billion of that net. And this is a company famous for having uncommitted billions in the bank already.

That's astonishing, and I say that as someone who's been skeptical (if also frequently admiring) of the Nintendo Wii. On the other hand, I have to wonder whether a lot of the Wii's success may turn out to be owed to the sort of impulse consumer who buys stuff like exercise equipment with all the good intentions in the world but dubious follow-through. A lot of people (including me) pick up games like Zelda and Mario, play them, then forget about our Wiis for months on end.

Still, my cynicism about that's starting to wear thin, because if there's a turnaround point lurking around the corner for the Wii sales-wise, we've all been dead wrong predicting where or when it'll be. And at a certain point it'll all be moot anyway, right? Before you know it, we'll be staring at a brand new generation of machines.

Speaking of which, my PC World colleague Danny Allen thinks Nintendo may have a hardware add-on up its sleeves, something along the lines of Sega's 32X. Don't let either the word "Sega" or "32X" put you off the possibility. Doesn't it make a certain amount of sense? Think about it. The Wii's a runaway success train, so what chip manufacturer wouldn't want to give Nintendo a break to be the nucleus of a power-boosting add-on? It wouldn't have to be extraordinarily powerful, either -- just enough to compete with Microsoft and Sony's second or third wind, something that two years ago might've cost $500, but today could be had for less than half that (and half again in two more). A piece, in other words, that might only cost consumers a hundred bucks or so in a year or two. And Nintendo could ensure it's success by bundling it with a killer "name" game, say the next Zelda or Mario or Super Smash Bros.

Sound ludicrous? Maybe. No one (least of all Nintendo) wants another Virtual Boy. Still, I wouldn't put an add-on in advance of a brand new system past them. A company pulling billions in net revenue annually -- revenue driven largely by a technologically "inferior" (but perhaps creatively "superior") platform -- could take the industry almost anywhere.

And if Nintendo's proven anything over the past few years, it's that they will, with bells on.

Update: Says Videogamer.com: Nintendo's forecasting it'll nearly strike 50 million Wii's sold by 2009, and upwards of 100 million DS's. The latter would put the DS in spitting distance of Sony's legendary PS2. A year ago, I would've called Nintendo nuts. Now, if anything, I'm inclined to think they're forecasting conservatively.

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