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Nintendo’s popular Switch console and blockbuster games, including “Animal Crossing,” fueled a sharp increase in profits and sales, which were also helped by players trapped at home due to the coronavirus pandemic.
The Japanese gaming giant said Thursday that it had netted annual profits of 258.6 billion yen (2.4 billion US dollars) in the fiscal year through March, a 33% gain from the previous year.
Sales jumped nine percent to 1.3 trillion yen, and the firm was quick to point to the success of “Animal Crossing: New Horizons,” which it said had enjoyed the strongest debut ever for a Nintendo Switch title.
The conglomerate is one of the “few” of the top companies that see significant business opportunities from the coronavirus outbreak, said Hideki Yasuda, an analyst at the Ace Research Institute in Tokyo.
“Video game demand has skyrocketed among people who stay home after the outbreak,” Yasuda said.
Nintendo’s shares have increased by 27 percent since early March.
However, the company also pointed out the risks stemming from the pandemic, including the production and acquisition of parts, and the delays in Research and Development.
For the current fiscal year, the company predicted a reduction in sales and profits, as the Switch enters a “crucial” fourth year: Past consoles began to decline in popularity after three years.
Nintendo sees a net profit of 200 billion yen for the fiscal year through March 2021, 23% less than the previous year, with an annual sales forecast of 1.2 trillion yen, 8.3% less.
The latest “Animal Crossing” has struck a chord with players around the world, many of them enjoying a virtual release from the restrictions on movement and social activity imposed to contain the coronavirus.
Among other Nintendo titles, “Pokemon Sword” and “Pokemon Shield” have also become billionaire sellers, following the greatest hits “Super Mario Maker 2”, “The Legend of Zelda: Link’s Awakening” and “Fire Emblem: Three Houses “.
Launched in March 2017, the Switch has become a huge global seller, aided by innovative and familiar titles that have captivated critics and gamers alike.
Sales of both its regular Switch platform and Switch Lite, a smaller and cheaper version, reached 21 million units for the fiscal year, well above its annual target updated three months ago.
Rival Sony plans to report its annual results next week as it prepares to launch its next-gen PlayStation 5 console later this year.
Analyst Imanaka said games like “Animal Crossing” would not fade away immediately as coronavirus restrictions are phased out.
“I hope that people who have started playing video games or online games will continue to play this quarter at least,” added Imanaka.
(With AFP input)
