JIN-246 -- A Newly Troubled Nintendo

==============================================
J@pan Inc Magazine Presents:

T H E J @ P A N I N C N E W S L E T T E R

Commentary on the Week's Business, Technology and Cultural News
===============================================

Issue No. 246
Friday, October 10, 2003
TOKYO

Subscribe for FREE:
http://www.japaninc.com/newsletters/index.html?list=jin

CONTENTS

>> Viewpoint:
-- A Newly Troubled Nintendo

========== PAN PACIFIC LEISURE PACKAGE ===========
At Pan Pacific Yokohama, you can have prepared a relaxing experience
for only 20,000 yen per night, incl. American breakfast.
For details, please check http://yokohama.panpacific.com/
===================================================

================= ADVERTISEMENT =================
Select Asset Management is a firm of independent financial advisors
with high professional and ethical standards established to help both
private and corporate clients organize and plan their affairs to
achieve their financial and personal goals.
We invite you to explore our range of services and learn more about
us through our website: www.selectasset.com
================================================

=============== ADVERTISEMENT ================
NOKIA Japan Co.,Ltd.

FINALLY THE NEW NOKIA 6650 ALLOWS YOU TO USE THE
SAME NUMBER IN JAPAN AND OVERSEAS*

The Nokia 6650 phone supports both WCDMA and GSM (900/1800MHz),
which can be used in Japan and many other countries outside Japan.
It can meet your calling needs across national borders --
look how convenient and comfortable life could be!

*Check out the NOKIA 6650 phone at:
http://www.nokia.co.jp/products/n6650/eng/index.html
===============================================

>> Viewpoint: A Newly Troubled Nintendo

Video games maker Nintendo, the company behind Mario, Pokemon and
Donkey Kong, has forecast a six-month loss for the first time in the
iconic firm's 41-year listed history.

In an announcement that stunned investors, Nintendo revealed a sudden
and dramatic reversal of fortunes. As recently as May, the maker of
GameBoy and GameCube consoles was talking bullishly of a first half
profit outlook of 15 billion yen.

Last Friday, that became a prediction of a 3 billion yen loss.

Nintendo blamed the recent extreme volatility in yen/dollar trading:
earlier in the week, the dollar crashed to a 34-month low against
the Japanese currency, badly denting the break-even calculations made
at the group's head office in Kyoto. Nintendo based its predictions for
fiscal 2003 on an average rate of 117 yen to the dollar. But on
Tuesday, the greenback plunged to the 110 yen mark.

The company said that the drop would contribute to 40 billion yen
of foreign exchange losses in the first half of fiscal 2003 and that
the full year net profit outlook would have to be cut from 65 billion
yen to 60 billion yen.

Last fiscal year, Nintendo posted a group net profit of 67.27 billion
yen, with sales of 504.14 billion yen.

Nintendo's grim news was no surprise to most Tokyo analysts, who
have long warned that the group has left itself dangerously exposed
to precisely this sort of disaster. Nintendo's own forecast downgrade
brought it in line with consensus analyst estimates. Although
Nintendo is not having an easy time in the hotly competitive global
video games market, the currency issue is not a particular headache
when it comes to the value of exports.

Currency volatility does present a problem, however, to Nintendo's
risky practice of keeping the lion's share of its foreign earnings
in the markets where it earns them, in the hope of making some money
from the interest -- which is always going to be higher than Japan's
near zero rates. Nintendo's US deposits amount to just over $5
billion, and though the strategy has reaped rewards in the past,
it has become a focal point for investor criticism in recent months.

The large cash pile has also become symbolic of Nindendo's dwindling
stock of decent ideas, say analysts. Many have strongly condemned
the company's inability to come up with any effective uses for the
$7.5 billion cash pile Nintendo is sitting on. It is widely thought
that Nintendo may hestitate before launching a new console again.
Although the GameCube is popular among a certain cross-section of
gamers, its appeal is weakened by the smaller range of games on
offer from Nintendo -- especially when compared with Sony's
PlayStation2.

Meanwhile, Nintendo continues its titanic battle to remain a
serious force in a global console market dominated by
PlayStation2, the emerging threat of Microsoft's Xbox
and a rapidly growing taste for online games.

Despite its many years of success and a rich history of
blockbuster machines and games, industry observers at last
week's influential Tokyo Game Show agreed: Nintendo
is beginning to look like a company in trouble.

The firm has already cut the price of its flagship GameCube
console to below $100 in a bid to keep sales vibrant. Similar
cuts are expected in Japan, Europe and the UK later this month.

-- The Editors

**FOR MORE:

"Game Over? The state of Nintendo's future," from
J@pan Inc magazine, June 2003:
http://www.japaninc.com/article.php?articleID=1119

================== EVENT =====================
GARTNER'S SYMPOSIUM/ITXPO 2003
Date: Nov. 19-21, 2003
Location: Le Meridien Grand Pacific (Odaiba, Tokyo)

Business today is all about reducing time, increasing speed, and
improving profits. Technology is the enabler.
Keeping up - and looking ahead - is your challenge and our strength.
Join over 2500 senior IT decision makers to hear Gartner's leading
global and Japanese analyst address technology issues that will
have the biggest impact on your enterprise over the next year.

View complete Symposium information at:
http://www.gartner.co.jp/symposium/eng/

================================================

=============== ADVERTISEMENT ==================
J@PAN INC magazine - the journal of business, technology and people in
Japan - invites you to participate in a "Real Estate Industry In Japan"
special ad section scheduled for the December 2003 issue.

The December 2003 special ad section will feature the major companies
actively responding to this competitive industry. Your company will be
interviewed for the ad section article and will be included in the
Directory Listings page, providing a tremendous opportunity for you
to engage customers, build relationships and explain your services to
a highly targeted audience.

For more information please contact:
Fabien Brogard on 3499-2175 ext: 1281 or email fabien@japaninc.com
===========================================

================= NEW LAUNCH =================
NEW!! Japan Inc Communications K.K. is proud to announce the launch
of its new portal site: japan.com - your one-stop, primary access
point for Business, Leisure, Entertainment and News on Japan.

Check it out NOW at: http://www.japan.com

We welcome your input, feedback, insights - even gripes. Please
share your comments and ideas. Help us make this site rock!
Contact:
Yves Bennaim on 3499-2175-1322 or at http://www.japan.com/contact/
==============================================

=============================================
SUBSCRIBERS: 9,294 as of October 10, 2003

STAFF
Written and edited by Roland Kelts and
Leo Lewis (editors@japaninc.com)

CHECK OUT OUR OTHER JAPAN-SPECIFIC NEWSLETTERS:
http://www.japaninc.com/subscribe_news.html

UNSUBSCRIBE
To unsubscribe from this newsletter, click here:
http://www.japaninc.com/unsubscribe_news.html

ADVERTISING INFORMATION
To advertise in this newsletter, contact:
ads@japaninc.com

GET THE MAGAZINE
Subscribe at:
http://www.japaninc.net/mag/subs.html

FEEDBACK AND PROBLEMS
We welcome your viewpoint:
editors@japaninc.com
(NB Please do not reply to this newsletter -- it's outgoing only,
so we won't get it!)

TECHNICAL PROBLEMS:
webmaster@japaninc.com

(C) Copyright 2003 Japan Inc Communications KK. All Rights Reserved.

business