Nintendo Q2 Profit Rises on Switch Sales

Japan’s Nintendo Co. Ltd. reported on Tuesday higher second-quarter operating income, driven by sales of its Switch consoles and games.

Nintendo stated that profit in the July- September period gained 30 percent to ¥30.9 billion ($274.11 million), marking as its highest quarterly result in eight years, although missing analysts’ forecasts.

Shares of Nintendo gained 1.6 percent to ¥35,250.0 ahead of the earnings release.The  stock price of the Kyoto-based firm reached a 10-year high in January although it has since dropped about 30 percent amid bigger losses in tech-related shares.

Nintendo Switch Sales Drives Profit

The Nintendo Switch became the main profit driver of the consumer electronics maker in the quarter. From April to September, the company sold 5.07 million of the consoles and 42 million Switch games, with Mario Tennis Aces and Donkey Kong Country: Tropical Freeze among the most sold titles.

That beats the 22 million recorded in the same period a year earlier, as upcoming games create a buzz among fans including next month’s Pokemon: Let’s Go titles and December’s Super Smash Bros. Ultimate. The company is counting a major lift from the two titles.

Nintendo kept its Switch sales forecast for the year ending March 2019 at 20 million units.

The result signaled a continued strong reception for the Nintendo Switch, which had already surpassed its immediate predecessor the Wii U in lifetime unit sales and the 2001-2007 era Nintendo GameCube in cumulative sales.

During its lifetime, the Wii U sold 11 million units, while GameCube sold just under 22 million units over the period of six years.        

Nintendo President Shuntaro Furukawa, who take on the role in June, said the sales target was a challenge but expressed confidence it would be reached.

Nintendo is also working on turning mobile gaming into an additional revenue stream, introducing its latest title, Dragalia Lost in September. The president of co-developer CyberAgent Inc. regarded the game as its number one hit weeks after its release.

Granblue Fantasy is also one of CyberAgent’s previous hits.

The partnership is the latest by Nintendo, whose mobile games like Mario Run and Animal Crossing: Pocket Camp have not been as greatly accepted as the augmented-reality monster catching game Pokemon Go from its partner, US software maker Niantic Inc.

The video game developer’s online services offerings for Switch has also been slow, despite the possibility of the product being able to offer a predictable revenue stream for a subscriber base – with Nintendo Switch Online being released last month.

Furukawa stated that the service had got off to a good start but he declined to provide financial details.

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