Nintendo is hoping important games like Mario and Zelda will help it attract players interested in its aging Switch line of consoles.
Charly Triballeau | AFP | beautiful pictures
Nintendo reported a decline in profit and revenue for the fiscal year due to a drop in sales of their flagship Switch console.
For the full fiscal year, which runs from April 2022 and ends on March 31 of this year, Nintendo reported revenue of 1.6 trillion yen, meeting its own forecast. That is a 5.5% decrease from the same period last year.
Nintendo reported a net profit of 432.7 billion yen for the fiscal year, down more than 9% from the same period last year. However, it was better than the company’s own forecast of 370 billion yen.
The Japanese game giant sold 17.97 million units of its flagship Nintendo Switch console, matching its own forecast of 18 million units for the fiscal year. That compares with just over 23 million Switch devices sold in the financial year ending March 2022, a 22% drop.
Nintendo said that “semiconductor and other component shortages affected production until around the end of summer” and that the company “did not experience significant sales growth during the holiday season”. last year.
For the fiscal year ending March 2024, Nintendo forecast Switch sales of 15 million units.
Nintendo is competing against an aging console with the Switch, which has been on the market for six years, with concerns from investors that its sales may have peaked. The company was twice forced to Switch sales forecast cut last financial year after a disappointing holiday season.
Throughout the Switch’s life, Nintendo has tried to refresh the console with handheld versions and versions with improved screens. That helped in the short term but did little to stem the general trend of falling sales.
In contrast, the opponent sony reported an all-time high profit for the year ended March 31. The company also sold a record 19.1 million PlayStation 5 in the financial year. Sony’s PlayStation 5 has only been on sale for a little over two years, so it’s still a stub.
Nintendo shares are up 3.6% this year while Sony shares are up 25%.
Switch ‘past its prime’
Serkan Toto, CEO of Tokyo-based game consulting firm Kantan Games, told CNBC: “The Nintendo Switch has had a great run but it’s definitely past its prime.
“Based on the forecast for the new financial (year) I don’t expect any miracles but rather a company that goes on autopilot and fulfills its obligations to Switch users Every console cycle has finally come to an end, and Nintendo, too, now needs a new piece of hardware to revive its sales.”
The key for Nintendo now is how it continues to earn revenue from its 114 million annual premium users. The gaming giant has a wide variety of games and recognizable characters from Pokemon to Mario.
However, Nintendo said software sales totaled 213.96 million units in the year ended March 31, down 9% from the same period last year.
Nintendo is set to release The Legend of Zelda: Tears of the Kingdom on Friday, one of its most popular franchises.
The company forecasts software sales of 180 million units for the current financial year, marking expectations for a further decline.
Nintendo said it expected net profit to fall 21.4% to 340340 billion for the year ending March 2024.
