Nintendo yesterday nearly doubled its full-year profit forecast as it pointed to sizzling sales of its Switch game console and a cheaper yen.
The Kyoto-based video game giant said it expects a net profit of ￥85 billion (US$748.2 million) for the fiscal year ending in March next year, well higher than an earlier estimate of ￥45 billion, as it boosted its revenue and operating profit estimates.
Nintendo also raised sales projections for Switch, which was launched in March with a price tag of US$300 and is seen as a new pillar for the company’s earnings.
Photo: AP
It now expects to move about 14 million Switch consoles this business year, up from an earlier 10 million forecast.
Switch, capable at home and on the go, blends Nintendo’s console and handheld device business with its fledgling mobile gaming strategy, which got a big brand win with Pokemon Go’s success last summer.
“Switch is in excellent shape as sales of both hardware and software are growing steadily,” Ace Research Institute analyst Hideki Yasuda said before the earnings announcement.
Nintendo is positioning itself for the year-end holiday shopping season with Switch, while a cheaper yen has also bolstered its bottom line.
A drop in the currency inflates the value of profits earned abroad by Japan’s exporters.
During the April-to-September period, the company launched several headline game titles for Switch, including Mario Kart 8 Deluxe and its popular Splatoon2.
Its Super Mario Odyssey released last week is also expected to increase sales for the second half, the firm said.
“A potential risk is a hardware shortage where they could not keep up with surging demand,” Rakuten Securities analyst Yasuo Imanaka said.
For the first half to last month, Nintendo’s net profit reached ￥51.5 billion, up 34.5 percent from a year earlier.
Operating profit came in at ￥40 billion, reversing a year-earlier operating loss, while revenue was ￥374.0 billion — nearly triple last year’s level.
Nintendo shares have nearly doubled since Switch’s launch, although they slipped 0.25 percent yesterday to end at ￥42,870. The earnings were announced after markets closed.
Nintendo said its Super Mario Run and other smartphone games racked up sales worth ￥17.9 billion, more than five times higher than a year earlier.
Smartphone game app Pokemon Go sparked a worldwide craze last year that has captured customers beyond Nintendo’s traditional fan base.
The mobile app, developed by an outsider, significantly spiced up its brand and spilled over to boost the popularity of the overall Pokemon franchise.
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