Nintendo Profits Jump 261% Thanks To Epic Switch Console Sales
Nintendo is doing quite well these days thanks to the Swittch and the popular games that it has made of the new game console. The company recorded revenue of 483 billion yen versus analysis forecasts of 408 billion yen for its most recently completed quarter. This represented a 177 percent increase year-over-year (YoY). Likewise, operating profit came in at a staggering 116.6 billion yen compared to a consensus estimate of 69.3 billion yen, representing a 261 percent increase YoY.
Nintendo had originally expected to sell 14 million Switch consoles during the fiscal year and has now upped that number to 15 million units. Nintendo had sold 10 million Switch consoles as of December 2017. The challenge for Nintendo is to keep that sales momentum going into the next fiscal year.
"During our first year, we’ve been fairly successful in selling the Switch to customers who have an interest in video games," President Tatsumi Kimishima said at a news conference Wednesday. "From our second year, we have to expand it dramatically to those who don’t play video games that often."
Nintendo has already stated that it expects to sell 20 million Switch consoles in fiscal 2018 and it will need to tap into the casual gamer market to reach its sales goals. With the increase in forecasted revenue comes an increase in overall revenue for Nintendo to 1.02 trillion yen, up from the previously forecast 960 billion yen.
Booming sales and popular games have helped Nintendo stock shares to double to the highest levels seen in a decade giving Nintendo a market value of 6.8 trillion yen. Nintendo has been able to beat its sales and profit forecasts despite the fact that it still has trouble meeting the demand for the console. "We did our best to boost production for the holiday period, but still saw shortages in Japan," said Kimishima.
Analysts also see the recently announced Nintendo Labo as a very good thing for Nintendo. "We assumed Nintendo would come out with some additional, new form of play. In the sense of being that ’something’, the Nintendo Labo represents a move toward the future slightly above what we had assumed," UBS AG analysts Sumito Takeda and Kenji Fukuyama wrote in a report this month. "The product could highlight again the depth of the concepts embodied in the Switch console."