Nintendo 2004 Annual Report Download

Download and view the complete annual report

Please find the complete 2004 Nintendo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 64

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64

200 4 ANNUAL REPORT
Nintendo Co., Ltd.

Table of contents

  • Page 1

  • Page 2

  • Page 3
    Nello Giambi / Getty Images

  • Page 4

  • Page 5
    ... age, gender or whether they've played a video game. The first and most visible example of this effort will be our new handheld product, code-named Nintendo DS. With dual screens, touch capabilities, wireless communication, voice recognition technology and other unique features, this unprecedented...

  • Page 6
    new por table game machine NINTENDO DS

  • Page 7

  • Page 8
    Seth Kushner / Getty Images

  • Page 9
    ...to expand the originality of their game designs. For instance, in a role-playing game, the action could take place on the first screen while the second provides a reference for a player s tools inventory. developers The possibilities are limited only by imaginations. NINTENDO DS : Super Mario 64 4

  • Page 10
    Tony Latham / Getty Images

  • Page 11
    ... before provided by any game device: PDA-like touch capabilities. Players no longer have to rely on just buttons to move characters or shift perspectives. They can navigate menus or access inventory items simply by touching the screen with a stylus or fingertip. NINTENDO DS : Metroid Prime Hunters

  • Page 12
    Joe McBride / Getty Images

  • Page 13
    ... of the two built-in wireless capabilities allow players to chat and play games without any connecting cords, completely untethered. By utilizing the wireless game sharing capabilities, multiple players can compete in games, even if only one person has a game card inserted. NINTENDO DS : PictoChat

  • Page 14
    Ma Reynolds / Getty Images

  • Page 15
    Microphone A built-in microphone means that players might need only to tell their games what to do, using voice commands or hand-clapping to control the action. Voice recognition technology expands game creation possibilities. NINTENDO DS : NINTENDOG

  • Page 16
    Nintendo DS is its tentative name. The hardware design and screen shots for Nintendo DS presented herein are currently under development.

  • Page 17
    Dual Screens Touch Screen Wireless Microphone Wireless Game Sharing 3 D Graphics Dual CPU : ARM 9 + ARM 7 New Media Dual Slots : DS & GBA

  • Page 18

  • Page 19

  • Page 20
    ...2004 HAL Laboratory,Inc. / Nintendo Mario Pinball ©2004 Nintendo Mario Party Advance ©2004 Nintendo Mario vs. Donkey Kong ©2004 Nintendo Developed by Nintendo Software Technology Corporation Pokémon FireRed & Pokémon LeafGreen ©2004 Pokémon ©1995-2004 Nintendo / Creatures Inc. / GAME FREAK...

  • Page 21
    ... Software Lineup from E3 2004 Legend of Zelda for Nintendo GameCube Star Fox Paper Mario 2 Metroid Prime 2 : Echoes Mario Tennis Legend of Zelda for Nintendo GameCube Metroid Prime 2 : Echoes Mario Tennis Paper Mario 2 Fire Emblem Legend of Zelda for Nintendo GameCube Donkey Kong Jungle...

  • Page 22

  • Page 23

  • Page 24
    Nintendo's Products Nintendo GameCube, Wave Bird, Game Boy Player, Game Boy Advance, e-Reader

  • Page 25

  • Page 26
    ...game play Nintendo GameCube Wireless Controller Nintendo GameCube WaveBird Everyone wants to be free when they play! The WaveBird Wireless Controller realizes this dream by eliminating cords and allowing Nintendo GameCube lovers to play free for more than 100 hours without replacing the batteries...

  • Page 27
    ... Color Game Boy Advance Software e-Reader Slide a paper card imprinted with special codes to expand the world of play. The e-Reader can be used with the Game Boy Advance alone, but when it s connected to the Nintendo GameCube, players can unlock new characters and items that will breathe new life...

  • Page 28
    ... America Inc. in Seattle, Washington, and merged the New York subsidiary into it. 1983 Started selling the home video game console Family Computer System employing a custom CPU (Central Processing Unit) and PPU (Picture Processing Unit). Listed stock on the first section of the Tokyo Stock Exchange...

  • Page 29
    ...cell phones. Launched Game Boy Advance worldwide. The new version of Game Boy employs a 32-bit CPU and can generate 32,000 colors simultaneously on the screen. Launched Nintendo GameCube in Japan and in U.S. e-Reader, which scans special barcodes printed on paper cards, is introduced as a peripheral...

  • Page 30
    Cumulative unit sales on consolidated basis As of March 31, 2004 Units in Millions Japan Hardware Game Boy Nintendo 64 Game Boy Advance Nintendo GameCube 3.46 15.00 32.47 5.54 *Game Boy Advance SP 3.68 13.21 Sof tware Game Boy Nintendo 64 Game Boy Advance Nintendo GameCube 18.90 50.00 157.04 ...

  • Page 31
    ... SP 13.48 38.19 Sof tware Game Boy Nintendo 64 Game Boy Advance Nintendo GameCube 5,011 88.98 150.00 343.91 18,522 185.22 136.80 Unit Sales Breakdown Outside Japan Units in Millions Hardware Game Boy N i n t e n d o 64 Game Boy Advance Nintendo GameCube The Americas Other Regions Software...

  • Page 32

  • Page 33
    ... of Operations and Financial Review Report of Independent Auditor Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Shareholders' Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Common Stock Information 32 33 34 37...

  • Page 34
    ... of readers outside Japan at the rate of ¥105 to US$1, the approximate rate of exchange at March 31, 2004. B : The computations of net income per share of common stock are based on the weighted average number of shares outstanding during each fiscal year. C: Cash dividends per share represent the...

  • Page 35
    ... of readers outside Japan at the rate of ¥105 to US$1, the approximate rate of exchange at March 31, 2004. B : The computations of net income per share of common stock are based on the weighted average number of shares outstanding during each fiscal year. C: Cash dividends per share represent the...

  • Page 36
    ... of the home entertainment console NINTENDO GAMECUBE, while introducing new gaming ideas under the theme "connectivity and integration" with the handheld system GAME BOY ADVANCE. In addition, Nintendo is developing and distributing fascinating software that can be enjoyed by anyone around the world...

  • Page 37
    ... into U.S. dollars solely for the convenience of readers outside Japan at the rate of ¥105 to US$1, the approximate rate of exchange at March 31, 2004. Risk Factors Various market risks that could significantly affect Nintendo's operating performance, share price, and financial condition are...

  • Page 38
    ... position, difficulty of recruiting and securing human resources, social disruption resulting from terrorist attacks, war, and other factors. (9) Dependency on Outside Manufacturers Nintendo commissions a number of certain outside manufacturers to produce key components or assemble finished products...

  • Page 39
    ... Auditor To the Board of Directors and Shareholders of Nintendo Co., Ltd. We have audited the accompanying consolidated balance sheets of Nintendo Co., Ltd. and its subsidiaries as of March 31, 2004 and 2003, and the related consolidated statements of income, shareholders' equity, and cash flows...

  • Page 40
    ... Sheets ¥ Japanese Yen in Millions $ U.S. Dollars in Thousands (Note 1) As of March 31, 2004 2003 2004 2003 Assets Current Assets Cash and cash equivalents Short-term investments (Note 3) Receivables Notes and trade accounts receivable Allowance for doubtful accounts Inventories (Note...

  • Page 41
    ... 2003 Liabilities and Shareholders' Equity Current Liabilities Notes and trade accounts payable Accrued income taxes Other current liabilities Total current liabilities Non-current Liabilities Non-current accounts payable Reserve for employee retirement and severance benefits (Note 6) Reserve for...

  • Page 42
    ... 437,844 713 $640,640 ¥ Japanese Yen $ U.S. Dollars (Note 1) Years ended March 31, 2004 2003 2004 2003 Per share information Net income (Note 2L) Cash dividends (Note 2L) ¥246.93 140 ¥482.15 140 $2.35 1.33 $4.59 1.33 See notes to consolidated financial statements. Nintendo Co., Ltd. and...

  • Page 43
    ...due to exclusion of affiliate with equity method applied Unrealized gains on other securities Translation adjustments Net changes in treasury stock Balance, March 31, 2003 Net income Cash dividends Directors' bonuses Loss on disposal of treasury stock Unrealized gains on other securities Translation...

  • Page 44
    ... Sales of business entities Other, net Net cash provided by (used in) investing activities Cash Flows from Financing Activities Payments for purchase of treasury stock Cash dividends paid Other, net Net cash provided by (used in) financing activities Effect of exchange rate changes on cash and cash...

  • Page 45
    ... statements issued in Japan for domestic reporting purposes. Nintendo Co., Ltd. (the "Company") and its subsidiaries in Japan maintain their accounts and records in accordance with the provisions set forth in the Japanese Commercial Code and the Securities and Exchange Law, and in conformity...

  • Page 46
    ...extent that they are not hedged by forward exchange contracts. With respect to financial statements of overseas subsidiaries, the balance sheet accounts are translated into Japanese yen at the exchange rates in effect at the balance sheet date except for shareholders' equity, which are translated at...

  • Page 47
    ... the cost of retirement benefit and plan assets at end of fiscal year. Benefits under the plan are generally based on the current rate of base salary, length of service and certain other factors when the termination occurs. Directors and corporate auditors customarily receive lump-sum payments upon...

  • Page 48
    ... Consolidated Financial Statements Years ended March 31, 2004 and 2003 Note 3. Short-term Investments and Investments in Securities Other securities with market value included in Investments in securities as of March 31, 2004 and 2003 were as follows: ¥ Japanese Yen in Millions $ U.S. Dollars in...

  • Page 49
    ... contracts outstanding at March 31, 2004 and 2003. Note 5. Inventories Losses incurred from the application of the lower of cost or market valuation of inventories have been charged to cost of sales in the accompanying consolidated statements of income. These losses amounted to ¥9,492 million ($90...

  • Page 50
    ... plans as well as defined benefit plans. The Company and certain consolidated subsidiaries may also pay extra retirement allowance to employees who have distinguished services. Retirement benefit obligations as of March 31, 2004 and 2003 were as follows: ¥ Japanese Yen in Millions $ U.S. Dollars...

  • Page 51
    ... Method of attributing benefits to years of service: b . Discount rate: c . Expected return rate on plan assets: d . Amortization years of prior service cost...incurred and charged to cost of sales, and selling, general and administrative expenses were ¥15,825 million ($150,715 thousand) and ¥14,599 ...

  • Page 52
    ...: ¥ Japanese Yen in Millions $ U.S. Dollars in Thousands (Note 1) As of March 31, 2004 Deferred tax assets: Inventory - write-downs and elimination of unrealized profit Accrued expenses Research and development costs Unrealized loss on land Reserve for employee retirement and severance benefits...

  • Page 53
    ... in Millions $ U.S. Dollars in Thousands (Note 1) As of March 31, 2003 Deferred tax assets: Inventory - write-downs and elimination of unrealized profit Accrued expenses Research and development costs Accrued enterprise tax Reserve for employee retirement and severance benefits Unrealized loss on...

  • Page 54
    ...thousand), respectively. Pro forma information of leased assets under finance leases that do not transfer ownership of the leased assets to the lessee on an "as if capitalized" basis as of March 31, 2004 and 2003 was as follows: ¥ Japanese Yen in Millions $ U.S. Dollars in Thousands (Note 1) As...

  • Page 55
    ... The Commission of the European Communities announced to impose a fine of EUR149 million on October 30, 2002 referring that Nintendo's past trade practices in Europe until 1998 fell upon "limitation of competition within the EU common market" which is prohibited by Article 81 in the EU treaty. The...

  • Page 56
    ... Financial Statements Years ended March 31, 2004 and 2003 B. Segment Information by Seller's Location ¥ Japanese Yen in Millions Year ended March 31, 2004 Japan The Americas Europe Other Total Eliminations or unallocated assets Consolidated Net sales and operating income Net sales Sales...

  • Page 57
    ...) ¥1,085,519 $ U.S. Dollars in Thousands (Note 1) Year ended March 31, 2003 Japan The Americas Europe Other Total Eliminations or unallocated assets Consolidated Net sales and operating income Net sales Sales to third parties Inter segment sales Total net sales Cost of sales and selling...

  • Page 58
    ...157 $106,750 $3,642,749 $4,899,130 $ U.S. Dollars in Thousands (Note 1) Year ended March 31, 2003 The Americas Europe Other Total Sales for overseas customers Consolidated net sales $2,351,233 $1,154,106 $87,409 $3,592,748 $4,797,600 Nintendo Co., Ltd. and consolidated subsidiaries 56

  • Page 59
    ... reported on the Osaka Stock Exchange, Section 1. Nintendo's stock is also traded on the Tokyo Stock Exchange, Section 1. A: The amounts presented herein are stated in Japanese yen and have been translated into U.S. dollars solely for the convenience of readers outside Japan at the rate of ¥105 to...

  • Page 60
    ... Corporate Headquarters 11-1, Kamitoba hokotate-cho, Minami-ku, Kyoto 601-8501, Japan Tel : (075) 662-9600 President Satoru Iwata* Senior Managing Director Yoshihiro Mori* Shinji Hatano* Genyo Takeda* Shigeru Miyamoto* Nobuo Nagai* Plants Uji Plant Uji Ogura Plant Uji Okubo Plant Offices...

  • Page 61
    ... Inc. NHR Inc. HFI Inc. SiRAS.com Inc. Nintendo Technology Development Inc. Nintendo Software Technology Corporation Rare Acquisition Inc. Nintendo Phuten Co., Ltd. Nintendo Services USA, Inc. Retro Studios, Inc. Nintendo of Europe GmbH Nintendo Center 63760 Großostheim, Germany Tel : 49-6026-950...

  • Page 62
    ... Ltd. common stock is listed on the Osaka Stock Exchange, Section 1 and the Tokyo Stock Exchange, Section 1. Public Relations Mr. Reginald Fils-Aime Executive Vice President, Sales and Marketing Mr. George Harrison Senior Vice President, Marketing & Corporate Communications Nintendo of America Inc...

  • Page 63

  • Page 64