Source: AFP
Gaming giant Nintendo raised its annual net profit forecast on Tuesday, saying a weak yen and steady sales of its Switch console, now in its seventh year, will boost earnings.
Sales rose in the first three quarters on major releases, including the new Zelda game, the company said, while the Super Mario movie helped sell games from the Mario franchise.
Nintendo now expects a net profit of 440 billion yen ($2.96 billion) this fiscal year, down from its previously announced forecast of 420 billion yen.
“This financial year marks the seventh year since the launch of the Nintendo Switch, but sales have remained steady and there are more annual users than ever before,” Nintendo said.
The Switch, both portable and TV compatible, became a must-have distraction for all age groups during the Covid pandemic, but the buzz around the gadget is slowly fading.
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The Kyoto-based company sold 13.74 million Switch consoles in April-December 2023, down 7.8 percent year-on-year.
Speculation is rife that Nintendo will soon announce a new console to replace the Switch, although the company has so far remained tight-lipped about its plans.
“It wouldn’t be a surprise if a next-generation engine is announced any time now,” Hideki Yasuda, an analyst at Toyo Securities, told AFP ahead of the earnings call.
Sam Naji, director of video game analytics and consulting firm SJN Insights, added that an announcement could come this summer, with a release likely in November to take advantage of Christmas sales.
“They have to get the timing right because they are aware of the fact that the moment they announce it, sales for the (existing) Switch will probably collapse or at least drop significantly,” Naji told AFP.
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Because the Switch is designed to cater to two markets — the older generation who play it as a console and the younger gamers who use it as a portable device — it will be difficult to find a new product, Naji said.
“Nintendo always surprises us, but I don’t see how you can improve on that,” he said.
“I wouldn’t be surprised if it’s basically a beefed-up version of the Switch” with more memory or a “more powerful chip.”
Nintendo’s net profit in the first three quarters rose about 18% year-over-year to 408 billion yen.
The weak yen, which inflates profits for Japanese exporters, had a positive impact on net sales, the company said.
Before the fiscal year ends, Nintendo also hopes to see the early success of new releases “Mario vs Donkey Kong” this month and “Princess Peach: Showtime!” on March.
Source: AFP