Nintendo 2006 Annual Report Download

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Annual Report 2006

Table of contents

  • Page 1
    A nnual Repor t 2006

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  • Page 4
    ... to play video games regardless of their age, gender or cultural background. Our goal is to expand the gaming population. The first tangible product that comes from this strategic direction is the Nintendo DS, which employs unique features like dual-screens, a touch-screen, wireless communication...

  • Page 5
    ... accelerate market expansion by creating software for an ever-expanding audience, and intuitive hardware like the Nintendo DS and the upgraded Nintendo DS Lite. In the home console market, Nintendo will launch Wii and establish a new standard in game control using the unprecedented Wii Remote, which...

  • Page 6
    ...Sold Sold ©2005 Nintendo. ©2005 Nintendo. ©2005-2006 Toshio Iwai/Nintendo. 6.65 Sold mil illion pcs. ©2005 Nintendo. ©2005 Nintendo. ©2005 Nintendo. The numbers shown above are consolidated sales in units (* show sales in units in Japan) for the fiscal year ended in March, 2006. 6.65...

  • Page 7
    ...SEAGAIA RESORT). mil illion pcs. 1.18 Sold * ©2006 Nintendo. ©2006 Plato. ©2005-2006 Nintendo. Tetris ® & ©19 85 ~2006 Elorg, a Tetris Holding Company. Licensed to The Tetris Company. Game Design by Alexey Pajitnov. Logo Design by Roger Dean. All Rights Reserved. Certain new game elements...

  • Page 8
    ...1995-2005 Nintendo / Creatures Inc. / GAME FREAK inc. Developed by Genius Sonority Inc. ©2005 Nintendo / INTELLIGENT SYSTEMS. ©2005 KONAMI/Nintendo. ©2004-2005 Nintendo. ©2004-2005 NAMCO. ©2005-2006 Nintendo. The numbers shown above are consolidated sales in units for the fiscal year ended...

  • Page 9
    Game Boy micro Game Boy Advance SP 3.57 Sold mil illion pcs. ©2005 Pokémon. ©1995-2005 Nintendo/Creatures Inc. /GAME FREAK inc. ©2004-2005 Nintendo /INTELLIGENT SYSTEMS. ©2004-2005 Nintendo. Co-developed by INTELLIGENT SYSTEMS. ©1996-2005 Nintendo. Game by Rare. ©2004-2005 Nintendo. ...

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    2006 release

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  • Page 12
    ..., opening a new market for children's playing cards in Japan. 1962 Listed stock on the second section of the Osaka Securities Exchange and on the Kyoto Stock Exchange. 1987 Released the Legend of Zelda in the U.S. 1988 On-line stock brokerage services utilizing the Family Computer Network System...

  • Page 13
    ... to feel vibrations during gameplay. Nintendo 64 hits the European market. In Japan, Nintendo introduces the Nintendo Power system to convenience stores where game players can rewrite their Super Famicom game content. Pokémon TV series starts in Japan. Launched Game Boy Advance SP, equipped with...

  • Page 14
    Cumulative unit sales on consolidated basis Hardware As of March 31, 2006 Units in Millions Worldwide Game Boy Advance (GBA) 75.1 20.9 16.7 Nintendo GameCube (GC ) Nintendo DS (DS) The Americas GBA GC DS 5.1 12.2 38.1 Japan GBA GC DS 4.0 6.9 16.6 Other Regions GBA GC DS 4.7 4.7 20.5 0 5 ...

  • Page 15
    ...2006 Units in Millions Worldwide Game Boy Advance (GBA) 327.7 189.1 60.4 Nintendo GameCube (GC ) Nintendo DS (DS) The Americas GBA GC DS 20.8 121. 6 182.6 Japan GBA GC DS 27. 0 25.3 69.8 Other Regions GBA GC DS 14.3 40.5 75.3 0 40 80 120 160 200 240 Software NES Game Boy SNES Nintendo...

  • Page 16
    ... Five-Year Summary / Common Stock Information Analysis 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...

  • Page 17
    ... table sets forth the high and low sale prices during Fiscal 2006 and 2005 for Nintendo Co., Ltd. common stock, as reported on the Osaka Securities Exchange, Section 1. Nintendo's stock is also traded on the Tokyo Stock Exchange, Section 1. 15 Nintendo Co., Ltd. and consolidated subsidiaries

  • Page 18
    ...Age: Train Your Brain in Minutes a Day", coupled with its sequel version, "Big Brain Academy", released only in Japan, brought total unit sales of these three "Touch! Generations" titles during the period to 5.10 million. In addition, "Nintendo Wi-Fi Connection" compatible titles such as "Mario Kart...

  • Page 19
    ... and as price competition intensifies with giant enterprises entering into the market. As a result, Nintendo may find difficulty in maintaining or expanding its market share as well as sustaining profitability. •Development of new products Although Nintendo continues to develop innovative and...

  • Page 20
    ... •Product valuation and adequate inventory procurement Demand for products in the video game industry is significantly impacted by consumer preferences as well as seasonality characterized by short product life cycles and very high demand around the holiday season. Although production is targeted...

  • Page 21
    ... of Nintendo Co., Ltd. and its subsidiaries as of March 31, 2005 and 2006, and the related consolidated statements of income, shareholders' equity, and cash flows for the years then ended, all expressed in Japanese Yen. These consolidated financial statements are the responsibility of the Company...

  • Page 22
    ... Sheets Japanese Yen in Millions ¥ $ U.S. Dollars in Thousands (Note 1) As of March 31, 2006 2005 2006 Assets Current Assets Cash and cash equivalents (Note 3) Short-term investments (Note 4) Receivables Notes and trade accounts receivable Allowance for doubtful accounts Inventories (Note...

  • Page 23
    ... Additional paid-in capital Retained earnings Unrealized gains on other securities (Note 4) Translation adjustments Total Treasury stock, at cost 13,754,896 shares in 2006 and 11,591,611 shares in 2005 Total shareholders' equity Total 10,065 11,585 1,096,074 10,717 763 1,129,204 (155,113) 974,091...

  • Page 24
    ...$840,842 Japanese Yen ¥ $ U.S. Dollars (Note 1) Years ended March 31, 2006 2005 2006 Per Share Information Net income (Note 2L) Cash dividends (Note 2L) ¥762.28 390 ¥662.96 270 $6.52 3.33 See notes to consolidated financial statements. Nintendo Co., Ltd. and consolidated subsidiaries...

  • Page 25
    Consolidated Statements of Shareholders' Equity Japanese Yen in Millions ¥ Years ended March 31, 2006 and 2005 Number of common shares in thousands Common stock Additional paid-in capital Retained earnings Unrealized gains on other securities Translation adjustments Treasury stock at cost...

  • Page 26
    ... and equipment Payments for investments in securities Proceeds from investments in securities Payments for investments in affiliates Sales of business entities Other, net Net cash used in investing activities Cash Flows from Financing Activities Payments for purchase of treasury stock Cash dividends...

  • Page 27
    ... the Company is incorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of ¥117 to US$1, the approximate rate of exchange at March 31, 2006. These translations should...

  • Page 28
    ...Under the Japanese accounting standard, trading securities and debt securities due within one year are presented as "current" and all the other securities are presented as "non-current." E. Inventories "Inventories" are stated at the lower of cost, determined by the moving average method, or market...

  • Page 29
    ... the cost of retirement benefits during the current consolidated accounting period, "Reserve for employee retirement and severance benefits" is booked as "Prepaid plan assets" in "Other assets". From the year ended March 31, 2006, the Company adopted the partial amendment of the Japanese Accounting...

  • Page 30
    ... Consolidated Financial Statements Years ended March 31, 2006 and 2005 Note 4. Short-term Investments and Investments in Securities Other securities with market value included in "Investments in securities" as of March 31, 2006 and 2005 were as follows: Japanese Yen in Millions ¥ $ U.S. Dollars...

  • Page 31
    Book value of non-marketable securities in "Short-term investments" and "Investments in securities" as of March 31, 2006 and 2005 were summarized as follows: Japanese Yen in Millions ¥ $ U.S. Dollars in Thousands (Note 1) As of March 31, 2006 2005 2006 (1) Held-to-maturity debt securities ...

  • Page 32
    ... 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, 2006 and 2005 were as follows: Japanese Yen in Millions ¥ $ U.S. Dollars in Thousands...

  • Page 33
    Retirement benefit costs for the years ended March 31, 2006 and 2005 were as follows: Japanese Yen in Millions ¥ $ U.S. Dollars in Thousands (Note 1) Years ended March 31, 2006 2005 2006 a. b. c. d. e. Service cost Interest cost Expected return on plan assets Amortization of actuarial ...

  • Page 34
    ... 31, 2006 2005 2006 Deferred tax assets: Research and development costs Inventory - write-downs and elimination of unrealized profit Other A/P and accrued expenses Accrued enterprise tax Land Unrealized loss on investments in securities Depreciation Reserve for employee retirement and severance...

  • Page 35
    Note 10. Leases The Company and certain consolidated subsidiaries lease computer equipment and other assets. Total lease payments under finance leases not deemed to transfer ownership of the leased assets to the lessee for the years ended March 31, 2006 and 2005 were ¥209 million ($1,787 thousand) ...

  • Page 36
    ...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 Company and its consolidated subsidiary found this fine to be unjustly high...

  • Page 37
    ... Information by Seller's Location Japanese Yen in Millions ¥ Year ended March 31, 2006 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...

  • Page 38
    ...March 31, 2006 and 2005 $ U.S. Dollars in Thousands (Note 1) Year ended March 31, 2006 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...

  • Page 39
    ... Consolidated net sales ¥256,969 ¥121,372 ¥9,883 ¥388,224 ¥514,988 $ U.S. Dollars in Thousands (Note 1) Year ended March 31, 2006 The Americas Europe Other Total Sales to overseas customers Consolidated net sales $1,805,086 $1,110,124 $98,558 $3,013,768 $4,348,951 37 Nintendo...

  • Page 40
    ... Tel : 31-30-6097100 Nintendo Australia Pty. Ltd. Affiliated companies with equity method applied Domestic: The Pokémon Company WARPSTAR, Inc. Principal offices and facilities [Domestic] Corporate Headquarters 11-1, Kamitoba hokotate-cho, Minami-ku, Kyoto 601-8501, Japan Tel : 81-75-662...

  • Page 41
    ...on the Osaka Securities Exchange, Section 1 and the Tokyo Stock Exchange, Section 1. Public Relations Mr. Reginald Fils-Aime President and Chief Operating Officer Mr. George Harrison Senior Vice President, Marketing & Corporate Communications Nintendo of America Inc. 4820 150th Avenue N.E. Redmond...

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