The burgeoning smartphone market appears to be standing in the way of growth in the traditional gaming sector, as Sony and Nintendo are forecasting low profits in the face of rising attention to smartphones.
According to a recent Bloomberg Businessweek report, officials from Sony recently cut the company’s profit estimates by 25 percent, while Nintendo is in even worse shape, dropping its predicted net income by 82 percent. That would make for Nintendo’s lowest net income in the past 25 years.
Yuuki Sakurai, president of Fukoku Capital Management, told Bloomberg that each company is feeling pressure from the evolving technology landscape around them, and adjusting themselves will be the only way they can rebound.
“Both companies need to forget their past successes and overhaul their businesses to adapt to the present,” Sakurai said. “Competition is harsh. You really need to make something that cannot be copied by others to make profit in such a market.”
Meanwhile, Samsung and Apple have thrived off smartphone sales lately. IMS Research predicts Samsung and Apple – manufacturers and vendors of smartphones using the market-leading Android and iOS platforms – to emerge as the top two manufacturers in a sector that is expected to reach 1 billion sales by 2016.
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