As concerns over the subprime market crisis have spread deeper into international markets, the value of the American dollar has swooned. According to a report at Bloomberg, the weakness of the dollar is having an effect on Japanese companies who rely on exports to the U.S. for revenue. Despite the overall vitality of Nintendo, their stocks still dropped as the yen hit a three-year high compared the dollar:
Nintendo, which sells more than twice as many Wii game machines in the Americas as in Japan, lost 5.8 percent to 50,200 yen in Osaka trading.
The Wii’s price is set, and as the value of the dollar decreases, the realized value of the sale to an exporter like Nintendo is immediately impacted. Even though some analysts claim that video games are recession-proof, that assertion may not hold for a Japanese corporation like Nintendo because the revenue is tied closely to the value of the dollar and, thus, to the economy of the United States.
Even as Wii-mania shows little sign of abating in Japan or stateside, there may still be rough times ahead for the company until the dollar begins to stabilize.
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