Nintendo raised its full-year net income guidance on Tuesday, with the weak yen and solid performance of new games helping offset falling sales of its Switch console.
Nintendo raised its full-year net income guidance on Tuesday, with the weak yen and solid performance of new games helping offset falling sales of its Switch console.
The Kyoto-based Japanese gaming giant estimated net income for the year ended March 2023 at 400 billion yen ($2.7 billion), up from a previous forecast of 340 billion yen.
Net profit for the half-year from April to September also rose 34.1 percent to 230 billion yen, the company said.
“In software, sales of titles like Splatoon 3 and Nintendo Switch Sports released this fiscal year have grown steadily,” it said.
“Titles that were released in previous financial years and titles from other software manufacturers have also performed well.”
Nintendo also saw its bottom line rise sharply on foreign exchange gains caused by the depreciation of the yen, which has fallen against the dollar this year to lows not seen since the 1990s.
In early October, it fell above 151 against the greenback for the first time in 32 years as the Bank of Japan maintained its ultra-loose monetary policy while the Federal Reserve hiked interest rates to fight inflation.
In 2020-21, Nintendo’s profits soared to an annual record 480 billion yen due to rising demand for indoor entertainment during the pandemic lockdowns.
The company almost reached that number in its most recent fiscal year, with its blockbuster Switch console continuing to perform well and software sales remaining strong.
But Switch sales have slowed, and Nintendo now expects to sell 19 million units this fiscal year, down two million units from previously expected. – Joint venture with DeNA – Nintendo sold 6.68 million units of the different types of Switch consoles it offers in the first half of the fiscal year, down over 19 percent year-on-year.
The slowdown in sales is due to a number of factors, including an ongoing global chip shortage, the company said.
The revised Switch sales forecast had been expected by some analysts, with Hideki Yasuda, a senior analyst at Toyo Securities, telling AFP ahead of the earnings estimate that Nintendo would “have a hard time” hitting its previous target of 21 million units sold .
But he said gains are likely to rise on the yen and the strong performance of Splatoon 3 in particular, which had the fastest sales of any Switch title in the first three days of its release in Japan.
“A new Pokemon title will launch in November and the company is seeing strong pre-orders in Japan,” Yasuda added.
The company left its full-year operating profit guidance unchanged at 500 billion yen. The sales forecast was revised from 1.60 trillion yen to 1.65 trillion yen.
Nintendo also announced on Tuesday a joint venture with Tokyo-based mobile gaming company DeNA that aims to “strengthen the digitization of Nintendo’s business.”
In a statement, Nintendo said the joint venture will research, develop and create “value-added services,” without giving further details.
The two companies announced their first partnership to develop games for smartphones in 2015.
Nintendo also acquired a stake in DeNA as part of a deal to develop smartphone games based on a variety of popular characters, possibly including Super Mario and Donkey Kong.
Nintendo said Tuesday’s joint venture announcement would have no impact on the company’s full-year results.
The switch maker will hold 80 percent of the joint venture, which will be called Nintendo Systems.
