Japanese video game giant Nintendo said Wednesday its net profit soared more than five-fold in the fiscal first quarter as its breakthrough Wii console and handheld machines flew off the shelves.
Nintendo sharply raised its full-year forecasts as it cranks up the pressure on rival Sony Corp., with the Wii outselling the PlayStation 3 several times over in key markets such as Japan and the United States.
Net earnings jumped to 80.25 billion yen (669 million US dollars) in the three months to June from 15.55 billion yen a year earlier, Nintendo Co. reported.
Revenue increased 160 percent to 340.44 billion yen as the company sold 3.43 million Wii consoles worldwide over the three months.
Nintendo has long dominated the market for handheld machines with its Game Boy and DS series.
Now it is challenging Sony's dominance in household consoles with its hit Wii that has an innovative controller that can be used to simulate the swinging of a tennis racket or even Harry Potter's wand.
"The gaming industry has woken up to the fact that there's a real commercial side to non-core gaming," said Hiroshi Kamide, an analyst at KBC Securities.
"Nintendo's been saying this for the last two or three years. They're really reaping the rewards of that strategy now."
Wii games, including "Super Paper Mario" and "Mario Party 8" were particularly popular, selling over a million units in the first quarter.
Kyoto-based Nintendo also sold 6.98 million of its DS handheld game console.
"The DS had a stunning (2006) but hardware sales in the first quarter are still up 54 percent from this time last year," said Kamide.
The "Brain Age" game -- billed as a way to exercise your mind to avoid senility -- also sold well, as did "New Super Mario Bros," featuring the world's most famous mustachioed Italian plumber.
Nintendo increased its full-year forecasts on the back of the strong sales and the weak yen, which is positive for export earnings.
It now expects a 40.6 percent rise in net profit to 245 billion yen for the year to next March, up from a previous forecast for 175 billion yen. Revenue is seen climbing 44.8 percent to 1.4 trillion yen.
Nintendo shares closed up 1,900 yen or 3.5 percent at 56,400 on the Tokyo Stock Exchange in the wake of the results, bucking an 0.80 percent fall on the benchmark Nikkei-225 index.
Analysts said Nintendo's new profit targets looked achievable and may even be raised again later in the year.
The strong performance contrasts sharply with Sony's game division which is expected to have remained in the red in the first quarter due to the huge cost of developing the PS3.
The Wii had sold more than three million units in Japan alone as of July 15 following its launch last December while Sony's domestic PS3 sales have only just topped one million after eight months, according to industry research.
"At the moment it's very hard to see a scenario in which the PS3 will be able to catch up with the Wii. That's simply not going to happen," said a consumer electronics analyst with a European bank who declined to be named.
Sony recently announced a 100-dollar price cut for the PS3 in North America in an effort to reinvigorate its flagging sales.