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Nintendo lifts annual net profit forecast

Nintendo lifts annual net profit forecast
This picture taken on November 7, 2022 shows people visiting a store of game giant Nintendo in Tokyo. - Nintendo were expected to announce their second quarter results later in the day on November 8. (Photo by Yuichi YAMAZAKI / AFP)

Nintendo raised its full-year net profit forecast on Tuesday, with the weak yen and a solid performance by new games helping compensate for falling sales of its Switch console.

The Kyoto-based Japanese gaming giant estimated net profit for the year to March 2023 at 400 billion yen ($2.7 billion), up from a previous projection of 340 billion yen.

Net profit for the half-year from April to September was also up 34.1 per cent to 230 billion yen, the firm said.

“For software, sales for titles such as Splatoon 3 and Nintendo Switch Sports that were released during this fiscal year have continued to grow steadily,” it said.

“Titles released in previous fiscal years as well as titles from other software publishers have also performed well.”

Nintendo also saw a significant boost to its bottom line from foreign exchange gains driven by the depreciation of the yen, which has tumbled against the dollar this year to lows not seen since the 1990s.

In early October, it dropped beyond 151 to the greenback for the first time in 32 years, as Japan’s central bank sticks to its ultra-loose monetary policy while the Federal Reserve hikes rates to tackle inflation.

In 2020-21, Nintendo’s profits soared to an annual record of 480 billion yen due to soaring demand for indoor entertainment during pandemic lockdowns.

The firm nearly matched that figure in the last financial year, with its blockbuster Switch console continuing to perform well and software sales staying strong.

But sales of the Switch have been slowing, and Nintendo said it now expects to sell 19 million units this fiscal year, two million units less than previously expected.

It sold 6.68 million units of the various types of Switch consoles it offers in the first half of the fiscal year, down over 19 per cent from a year earlier.

The slowing sales were due to a range of factors, including an ongoing global chip shortage, the firm said.

AFP

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