Nintendo Co’s quarterly profit topped estimates as more people bought its new Switch gaming machine, lifting expectations for brisk sales during the holiday shopping period.
Operating profit for the April to June period, the first full quarter of sales for the Switch, was ¥16.2 billion (US$145 million), exceeding analysts’ average projection for ¥10.6 billion. The Kyoto-based company sold 1.97 million Switch units during the period and kept its forecast for 10 million shipments through March. Revenue more than doubled to ¥154.1 billion, topping analysts’ prediction for ¥139 billion.
Nintendo is betting that the Switch will fuel a new era of growth as more people embrace its dual role as a gaming device that can be used at home, or on the go. That has also raised questions over whether the company is abandoning its two-gadget strategy of selling consoles and handheld gaming devices. While sales have been solid, analysts and investors are looking for signs that Nintendo would boost production or forecasts.
“Nintendo has already said they’ll increase production during the summer, so this is a chance to confirm how that’s coming along,” Tomoaki Kawasaki, an analyst at Iwai Cosmo Securities Co, said before the earnings release.
Nintendo shares rose 1.3 percent in Tokyo prior to the results, leaving them up more than 50 percent since the Switch went on sale.
Last month, Nintendo apologized to customers in Japan for Switch shortages and promised to increase production, without providing a time line or further details. The company sold 2.74 million units in the device’s first month in March, topping its outlook for 2 million. It forecasts 10 million units globally this fiscal year, while analysts are projecting 13 million shipments, the average of estimates compiled by Bloomberg said.
For the older handheld device 3DS, Nintendo sold 950,000 3DS units during the quarter, a slight increase from a year earlier.
Switch demand in the latest quarter got a boost from the launch of several key titles, including Mario Kart 8 Deluxe, Arms and Minecraft.
In total, the company sold 8.14 million Switch software titles during the period and kept its forecast for 35 million games this fiscal year.
“As long as we get decent figures, people will assume it will sell even more during the holiday shopping season,” Kawasaki said, without providing a specific target.
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