TOKYO (AFP) – Nintendo downgraded its annual sales forecast yesterday as net profit plunged 60 per cent year-on-year in the first half, with fans awaiting the announcement of a new console.
Last year, the Japanese video game giant scored with the smash-hit Super Mario Bros film and the release of Legend of Zelda: Tears of the Kingdom, the fastest-selling game in nearly four decades of the Zelda franchise.
But times are now tighter for the company, which has promised news on the successor to its popular but ageing Switch console by the end of March 2025.
“Unit sales of both hardware and software were extremely high for the first half of the previous fiscal year,” Nintendo said, adding that the Mario movie had “energised our dedicated video game platform business”.
“There were no such special factors in the first half of this fiscal year, and with Nintendo Switch now in its eighth year since launch, unit sales of both hardware and software decreased significantly,” it added.
In the April-September period, Nintendo logged net profit of JPY108.7 billion (USD710 million), down 60 per cent from the same period a year earlier.
The Kyoto-based company kept unchanged its downbeat full-year net profit forecast of JPY300 billion – a drop of nearly 40 per cent from the JPY490 billion in 2023-24.
It now expects sales of JPY1.28 trillion, down from the previous estimate of JPY1.35 trillion, and also issued a less optimistic operating profit forecast.
The Switch, both a handheld and TV-compatible device, became a must-have distraction among all age groups during the COVID pandemic, but buzz around the console is fading.
“Unit sales for the entire Nintendo Switch family of systems decreased 31 per cent year-on-year to 4.72 million units” in the first half, Nintendo said yesterday. Software unit sales were down nearly 28 per cent on-year, it added.
For now “the company is focused on increasing sales of the current Switch console in 2024, so a lot of news flow about the next console may happen in mid-January 2025 and later”, Takeshi Koyama of Mizuho Securities said ahead of the results. For several years, Nintendo has been pursuing a strategy to reach a wider audience, analysts say. The company last month opened its first museum in a renovated factory in Kyoto, showcasing its long history since starting life in 1889 producing playing cards.
