News: Nintendo Blow | LCD Costs to Cut Into Profit Margins Page 1

Nintendo Blow | LCD Costs to Cut Into Profit Margins

13.05.2004

LCD Screen Prices...
...Cutting into Future Profit Margins!

At the E3 event yesterday, Nintendo President Satoru Iwata admitted that not everything regarding the Nintendo DS was going to plan. Whereas large orders of Liquid Crystal Display (LCD) screens normally makes manufacturers go weak at the knees, the immense demand for LCDs in mobile phones, PDAs and the upcoming PSP & Nintendo DS has caused some problems with supply levels.

Therefore, despite Sharp working cloesly with Nintendo to steadily produce enough three-inch TFT screens for the new Nintendo portable, there could well be a 'supply crunch' and prices may indeed rise, thus cutting into Nintendo's expected profit margins for the DS.

Iwata-san himself had this to say on the matter, "Ordinarily, if we said to a supplier that we plan to make a product with two screens, they would be happy, but this time they said, 'two screens, that's a bit of a challenge.'

"Of course we have no intention of taking a huge loss in the beginning, but I'm not sure if we can efficiently boost profit from the start like we did with the Game Boy Advance, but this is something I think we can repair with time."

The actual pricing of the DS as well as initial shipment numbers have not been revealed so far. However, analysts are stating a possible $150 (~