Mario and Link have a new task, and it’s a quest which few of the millions of fans of the fat plumber and the elven boy could have anticipated; forget Peach and Zelda, this time the two plucky heroes must rescue Nintendo from the clutches of the unsteady global currency markets and the strengthening yen.
Shares in the giant Japanese publisher fell steadily last week, dropping below 15,000 yen on several occasions – the first time that Nintendo shares have done so since the September 11 attacks – as some analysts predicted that the company may realise less than half of its forecasted 90 billion yen (£500m) profit forecast for the year, and may even slip into the red for the first half of fiscal 2002/03.
Over two thirds of Nintendo’s sales come from outside Japan, and the company holds billions of dollars worth of assets in Europe and the USA. Last year, the weak yen and strong dollar added a massive bonus to Nintendo’s annual figures; the reversal of that situation this year has seen the share price of the company drop 35 per cent since January and may well damage the company’s short-term finances seriously. Nintendo’s estimates for the year are based on an exchange rate of 130 yen to the dollar; this is currently trading at around 115 yen to the dollar.
However, the trump card held by Nintendo in the face of such currency-related difficulties is, as ever, its strong software line-up. Last Friday saw the release of Mario Sunshine on the GameCube in Japan, supported by an aggressive marketing strategy. A similar set of promotions will accompany Legend of Zelda in December, which will be launched in the USA in February – just in time for US sales to figure in the company’s 2002/03 figures. Meanwhile, Pokemon Ruby and Pokemon Sapphire on the GBA will arrive in Japan in November.
All of these titles are expected to sell extremely well, and although the success of such software has been factored into the share price of the company and into its financials, such high-profile launches and visible demand for the titles will undoubtedly bolster stock market confidence in Nintendo.
Following in Nintendo’s footsteps, Capcom is to release a free demo disc of Resident Evil 0 on the GameCube, which will be distributed to everyone who pre-orders the title as well as through other outlets. The game is the first of two totally original Resident Evil titles which will appear on the Cube. It follows the success of the remake of the first Resident Evil game, which will be launched in Europe in September. No word has yet been forthcoming about the possibility of a GameCube demo disc strategy in Europe.