Nintendo's Switch Sales, Profit Slump as Successor Console Awaited — 2nd Update

By Kosaku Narioka

Nintendo reported a drop in first-quarter net profit due to weaker sales of its aging Switch console and software.

The Japanese videogame maker said Friday that net profit fell 55% from a year earlier to 80.95 billion yen, equivalent to $542 million, for the three months ended June. That missed the estimate of Y88.33 billion in a poll of analysts by data provider FactSet.

First-quarter revenue decreased 47% from a year earlier to Y246.64 billion, as Switch sales dropped 46% to 2.1 million consoles and Switch software sales fell 41% to 30.6 million copies.

Console and software sales in the year-earlier period had been boosted by hit title "The Legend of Zelda: Tears of the Kingdom."

Operating-profit margin deteriorated to 22% from 40% a year earlier.

Nintendo kept its sales forecasts for Switch console and software and earnings projections for the fiscal year ending March 2025. The company continues to expect to sell 13.5 million Switch consoles and 165.0 million Switch software copies this fiscal year. It continues to project revenue to drop 19% to Y1.350 trillion and for net profit to fall 39% to Y300.00 billion.

The videogame industry is struggling to regain its vigor seen during a pandemic-driven boom a few years ago.

Nintendo said in May that it would announce a successor to its seven-year-old Switch videogame console by the end of March 2025.

The Japanese videogame maker has been trying to diversify its income streams, using its popular characters and game series in movies and other forms of entertainment outside the videogame space.

First-quarter mobile and intellectual property-related income fell 54% to Y14.7 billion from a high base owing to the blockbuster success of last year's "The Super Mario Bros. Movie."

Nintendo and Santa Monica, Calif.-based animation studio Illumination said in March that they would produce a new animated Super Mario film.

The Japanese company has also said it will develop a live-action film based on popular action-adventure series "The Legend of Zelda."

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

August 02, 2024 04:05 ET (08:05 GMT)

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