Nintendo recently reported its six-month financial results for the first half of the current fiscal year, and the Kyoto, Japan-based publisher and developer had a pretty good haul, though certainly well below company expectations. According to data obtained by Gamasutra, total profit for the period came in at a cool $772 million, a 52 percent year-over-year decrease attributed to unfavorable exchange rates, as well as lower software and hardware sales. As a result, Nintendo significantly cut profit forecasts.

On the surface, it might seem like Nintendo’s gold-plated castle is eroding. Some might even suggest that the Wii and DS maker is in a tough spot, and should start searching for the panic button. Looking at the numbers though, I don’t agree.

Compared to the entirety of Sony, which expects to lose $1.04 billion during the fiscal year ending March 31, 2010, Nintendo’s financial results look much rosier. The latter is, after all, still making money.

While it’s true that Wii sales are down compared to last year, Nintendo still sold 462,800 units in the U.S. during month of September. Pretty impressive to say the least. On the NPD hardware chart, it ranked third behind Nintendo’s own DS handheld, and Sony’s PlayStation 3, the latter of which saw a significant boost in sales thanks to the introduction of the 120 GB SKU. Nintendo recently slashed the Wii price by $50, but the massive surge in PS3 sales suggests that a significant number of consumers were waiting for the price to hit a so-called sweet spot.

For the five months preceding September, the Wii easily bested the Xbox 360 and PS3, with sales ranging from 252,500 to 361,700, according to NPD data obtained by Gamasutra. From April to August, only the DS managed to do better.

In handheld-dominated Japan, the PS3 has outsold the Wii consistently since the introduction of the 120 GB system, though the numbers have been extremely close in recent weeks. It will be interesting to see how things develop through the holiday season.

At some point though, weren’t Wii sales bound to decline? According to Gamasutra, the system shifted 10 million units between March 31 and Sept. 30 of 2008. By comparison, the PS3 moved 10.1 million for the entire fiscal year. To expect that adoption rate to extend through an entire console generation would be beyond ludicrous. You’d have to be an utter moron with no concept of market saturation.

As for the DS line, it continues to sell like crazy, and seems permanently affixed to the top of the U.S. and Japanese hardware charts. Expect that trend to continue with the DSi LL launching in Japan in November, and the DSi XL in North America and Europe next year.

Nintendo-published Wii software has been pretty rank as of late, but the company has some heavyweights on the way, including New Super Mario Bros. Wii, Metroid: Other M and Super Mario Galaxy 2. I also expect evergreen titles like Wii Sports Resort, Wii Fit Plus and Mario Kart Wii to continue to sell.

On the portable front, Nintendo is prepping The Legend of Zelda: Spirit Tracks for release in all territories, as well as Pokemon HeartGold and Pokemon SoulSilver, which have yet to launch outside of Japan. New Super Mario Bros. and Mario Kart DS are likely to remain popular choices for new DS adopters.

I’m not saying that Nintendo is an infallible juggernaut or that the Wii will always be a hot seller. To the contrary, I see unclaimed systems sitting on retail shelves all the time. I just don’t believe that the sky is falling. The platform holder’s “Blue Ocean” strategy has certainly given it the advantage this generation, though what will happen in the future is merely conjecture. Look how quickly Nintendo rose to dominance after the GameCube generation. At the same time though, it seems there will always be an audience for Mario and Zelda games. Many kids are growing up with the plump plumber and Hylian hero much like their parents did on the NES, Game Boy and SNES. Most importantly though, let’s not forget that Nintendo is king of both the home and handheld console markets. So, don’t sound the alarm yet.  From where I sit, Nintendo is doing just fine.

Sources: Gamasutra, Gamasutra, Gamasutra, Gamasutra, Gamasutra

Five Gamasutra links in one post. That must be a record.