Japan’s Nintendo said on Thursday sales of its Switch console fell 22 percent in the first quarter as demand for the hit device fades in its fifth year on the market. Investors are watching gaming firms closely for signals that the COVID-19 pandemic sales boom may be running out of steam. Nintendo is highly dependent on the cyclical console business, with sales of its devices traditionally peaking around the fifth year. Nintendo saw sales of Switch Lite units more than halve to 1.14 million during the April-June quarter but maintained its full-year forecast for Switch hardware at 25.5 million units. It sold 4.45 million Switch consoles, including the Lite, during the quarter.
The creator of Super Mario and Animal Crossing said first-quarter operating profit fell 17 percent to JPY 119.8 billion (roughly Rs 8,110 crores), falling short of a Refinitiv consensus estimate of JPY 129.3 billion (roughly Rs 8,760 crores). In contrast, Sony said on Wednesday sales of its new PlayStation 5 were robust, helping it post a record profit during the quarter. Both companies have warned that shortages of semiconductors could hurt game console output beyond current targets. Kyoto-based Nintendo is hoping to revive Switch sales momentum with a new $349.99 (roughly Rs 25,940) Switch OLED model launching on October 8. It is also relying on a pipeline of popular games including WarioWare: Get It Together and remakes of Pokemon titles to boost earnings.
It stuck with its full-year profit forecast of JPY 500 billion (roughly Rs 33,900 crores), lower than an average prediction of JPY 623.5 billion (roughly Rs 42,230 crores). The company is known for releasing conservative profit outlooks that it revises up through the business year. In a shareholder pleasing move, Nintendo on Thursday also announced a plan to buy back up to 1.51 percent of its shares worth up JPY 100 billion (roughly Rs 6,770 crores).
Read all the Latest News, Breaking News and Coronavirus News here