Nintendo Teases Switch Successor After Weak Guidance — Update
By Kosaku Narioka
Nintendo said it will announce a successor to its seven-year-old Switch videogame console after guiding for a significant profit drop this fiscal year on weaker device and game sales.
The Japanese videogame maker said on a verified X account that there will be an announcement on the successor to the hardware by the end of March next year, shortly after it said it expects to sell 13.5 million Switch consoles in the current fiscal year, down from the 15.7 million units it sold a year earlier.
Nintendo on Tuesday said it expects net profit to drop 39% to 300.00 billion yen ($1.95 billion) and revenue to fall 19% to Y1.350 trillion for the year that began on April 1.
The videogame industry is struggling to regain its vigor following a pandemic-driven boom a few years ago. Earlier this year, Sony Group laid off about 900 employees from its PlayStation business. Microsoft cut about 8% of its videogaming staff following its acquisition of Activision Blizzard in October.
Nintendo forecast it will sell 165.0 million Switch software copies this fiscal year, lower than the 199.7 million copies it sold the previous year.
The Japanese videogame maker has been taking steps to diversify its income streams, using its popular characters and game series in movies and other forms of entertainment outside the videogame space.
Nintendo and Santa Monica-based animation studio Illumination said in March they would produce a new animated Super Mario film, following the blockbuster success of last year's "The Super Mario Bros. Movie."
The Japanese company has also said it will develop a live-action film based on popular action-adventure series "The Legend of Zelda."
For the year ended March, net profit increased 13% to Y490.60 billion. That beat the estimate of Y458.12 billion compiled in a poll of analysts by data provider FactSet.
Revenue grew 4.4% to Y1.672 trillion, bolstered by the box-office success of the Super Mario movie, which provided a tailwind for Mario game titles. "The Legend of Zelda: Tears of the Kingdom" also sold well.
Mobile and intellectual property-related income climbed 82% to Y92.7 billion.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
(END) Dow Jones Newswires
May 07, 2024 04:37 ET (08:37 GMT)
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