Nintendo Switch saw a drop in sales: In its quarterly financial report, Nintendo said that it had sold 4.45 million Switch systems, including the Lite version.
Nintendo said on Thursday that sales of the Switch console plummeted 22% in the first quarter, as the blockbuster device’s popularity declines in its fifth year on the market.
Investors are keeping a tight eye on game companies for signs that the COVID-19 pandemic sales surge is slowing down. Nintendo is heavily reliant on the cyclical console market, with device sales typically peaking around the fifth year.
During the April-June quarter, Nintendo saw Switch Lite sales drop by more than half to 1.14 million devices, but the company kept its full-year projection for Switch hardware at 25.5 million units. During the quarter, it sold 4.45 million Switch systems, including the Lite.
The company behind Super Mario and Animal Crossing reported a 17 percent drop in first-quarter operating profit to JPY 119.8 billion (approximately Rs. 8,110 crores), below the Refinitiv consensus forecast of JPY 129.3 billion (roughly Rs. 8,760 crores).
Sony, on the other hand, said on Wednesday that sales of its new PlayStation 5 were strong, resulting in a record profit for the quarter.
Both firms have warned that chip shortages might reduce gaming console production beyond current levels.
With a new $349.99 (approximately Rs. 25,940) Switch OLED model arriving on Oct. 8, Kyoto-based Nintendo hopes to rekindle Switch sales momentum. It’s also counting on a steady stream of popular games, such as WarioWare: Get It Together and Pokemon remakes, to improve revenue.
It maintained its full-year profit projection of JPY 500 billion (approximately Rs. 33,870 crores), which was lower than the average forecast of JPY 623.5 billion (roughly Rs. 42,230 crores). The corporation is notorious for issuing cautious profit forecasts that are revised upwards during the year.
Nintendo also announced on Thursday a proposal to buy back up to 1.51% of its shares, valued up to JPY 100 billion, in a move that will please shareholders (roughly Rs. 6,770 crores).
© Thomson Reuters 2021