Nintendo raises DS shipment forecast on strong demand

Sales of the Nintendo DS handheld gaming device are going better than expected, prompting Nintendo Co. Ltd. to raise its full-year shipment forecast, the company's president said Thursday.

The company now anticipates it will ship 2.8 million units in the U.S. and Japan by the end of this year, said Satoru Iwata, president of Nintendo, speaking at the Foreign Correspondents' Club of Japan. Nintendo had previously said it expected shipments in each market to reach 1 million this year.

Nintendo launched the DS in the U.S. on Nov. 21 and followed it with a launch in Japan on Dec. 2.

Shipments of the DS totaled more than 500,000 units during its first week in U.S. stores, said Iwata.

"More than 90 percent of the shipped products are sold and we are continually feeding the market with additional hardware," he said of the U.S. market. There are some product shortages in the U.S. and the experience a week later with the Japanese launch was similar, he said.

In reaction to the strong demand, Nintendo is now planning to increase production of the device at the Chinese factories where it is made.

Iwata wouldn't reveal current production levels but said the company is intending to increase production after April next year to about 1.5 million units per week and 2 million per week around periods of peak demand.

Production of the DS has already dictated some of the company's strategy.

Nintendo's launch of the DS in the U.S. ahead of Japan was unusual and was necessary in order to meet the Thanksgiving and Christmas holiday sales periods in the U.S. If it was to launch in the U.S. before Thanksgiving, it needed to have enough units in stores to meet demand, and production levels meant that wouldn't be possible if it was also on sale in Japan. Thus, Nintendo put the Japanese launch second to match its production schedule, said Iwata.

The company plans to launch the DS in Europe in the first quarter of 2005.

The Nintendo DS is a clam-shell form-factor games device with dual LCD (liquid crystal display) screens, one of which is touch-sensitive. It also includes a microphone, and both the touch-screen and microphone can be used as input devices in certain games. The DS is also equipped with a wireless LAN adapter that allows users to play games against each other and also enter a group chat room with up to 16 users.

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