Hit games Splatoon 3 and the new Pokemon titles helped Nintendo Co beat its annual net profit forecast yesterday, but the company predicted tougher times ahead as its Switch console ages.
The weak yen also inflated earnings for the Japanese gaming giant, which has recently had huge success at the box office with The Super Mario Bros Movie, this year’s first film to pass the global US$1 billion mark.
Nintendo posted a ￥432.7 billion (US$3.2 billion) net profit for the year to March, beating its forecast of ￥370 billion, but dipping 9.4 percent year-on-year as the chip shortage drove down Switch production.
Photo: AFP
Christmas sales were also weaker than usual, it said.
Robust software sales were a positive factor, with 35 game titles selling more than 1 million copies during the year.
However, the company forecast a drop in net profit for this financial year to ￥340 billion as it seeks to extend the profitability of the Switch, now in its seventh year.
“By continuing to convey the appeal of Nintendo Switch, we try to not only put one system in every home, but several in every home, or even one for every person,” Nintendo said in a statement.
“Another objective is to continually release new offerings so more consumers keep playing Nintendo Switch even longer and we can maximize hardware sales,” it said.
The firm sold nearly 18 million Switch consoles in the financial year ending March — down 22 percent year-on-year, but meeting its forecast, which was lowered from an original target of 21 million as the chip crunch hampered production.
In the financial year ending March 2021, Nintendo’s net profit soared to a record of ￥480 billion, thanks to booming demand for indoor entertainment during COVID-19 lockdowns and the runaway success of the game Animal Crossing.
The firm nearly matched that figure in the financial year ending March last year, but sales of the Switch, which was launched in 2017, and the console’s Lite and OLED variations, are slowing.
The company is to release the latest installment in its long-running Legend of Zelda game series, titled Tears of the Kingdom for the Switch on Friday.
Serkan Toto from Tokyo-based industry consultancy Kantan Games said the new Zelda game would “definitely” be the biggest contributor to Nintendo’s sales this financial year, even though there could be other surprise releases in the pipeline.
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