Japan’s Nintendo said Thursday that sales of its Switch console dropped 22 percent in the first quarter as demand for the popular device slumped in its fifth year in the market.
Investors are watching gaming firms closely for signals that the boom in sales of the COVID-19 pandemic could fizzle out. Nintendo is heavily dependent on the console cyclical business, with sales of its devices traditionally peaking around the fifth year.
Nintendo noted that Switch Lite sales more than halved to 1.14 million during the April-June quarter, but maintained its annual forecast for Switch hardware at 25.5 million units. There were 4.45 million Switch consoles sold in the quarter, including Lite.
The creator of Super Mario and Animal Crossing said first-quarter operating income fell 17 percent to ¥ 119.8 billion (roughly Rs 8,110), below Refinitiv’s consensus estimate of ¥ 129.3 billion (roughly Rs 8,760).
In contrast, Sony said Wednesday that sales of its new PlayStation 5 were strong, helping the company post record profit during the quarter.
Both companies have warned that a shortage of semiconductors could negatively impact game console performance beyond current targets.
Kyoto-based Nintendo hopes to revive the momentum in Switch sales by releasing a new $ 349.99 (roughly Rs. 25,940) Switch OLED model on October 8. She also relies on a number of popular games including WarioWare: Get It Together and Pokemon remakes. titles to increase earnings.
He stuck to his annual profit forecast of 500 billion yen (approximately Rs 33,870), below the average forecast of 623.5 billion yen (approximately Rs 42,230 crores). The company is known for publishing conservative earnings forecasts, which it revises during the financial year.
Nintendo on Thursday also announced a plan to buy back up to 1.51 percent of its 100 billion yen (roughly Rs.6,770 crore) shares, which was pleasing to shareholders.
© Thomson Reuters 2021