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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 gamers who were stuck at home due to the coronavirus pandemic.
The Japanese gaming giant said Thursday that it had made annual net profits of 258.6 billion yen ($ 2.4 billion) in the fiscal year through March, a 33 percent 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 for a Nintendo Switch title.
“Nintendo Switch worked very well without losing momentum,” the Kyoto-based firm said in a statement.
The conglomerate is one of the “few” of the top companies that see significant business opportunities for 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 told AFP.
Nintendo shares, which closed 3.24% on Thursday before its earnings announcement, have risen 27% since the beginning of March.
However, the company also noted risks from the pandemic, including production and procurement of parts, and 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.
‘Stay at home’
Yasuda said the popularity of the latest “Animal Crossing” title should continue to generate profits for the current fiscal year.
The leisurely game 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.
“‘ Animal Crossing “does not involve many violent actions,” said Yasuo Imanaka, chief analyst at Rakuten Securities.
The ability to invite online friends to play and shop together in this virtual world has attracted those locked up due to the coronavirus, Imanaka told AFP.
“This fits perfectly with the sentiment of people staying at home around the world,” Imanaka said, adding that the calm atmosphere of the game was especially attractive to women and children.
Among other Nintendo titles, “Pokemon Sword” and “Pokemon Shield” have also become sellers of several million units, following the greatest hits “Super Mario Maker 2”, “The Legend of Zelda: Link’s Awakening” and “Fire Emblem: Three Casas “.
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, as 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,” Imanaka told AFP.
– AFP
