Nintendo Switch Console And Game Sales Boost Nintendo’s Profits

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The Nintendo Switch console is difficult to find despite having been launched more than four months ago. It helped Nintendo jump to profitability during the fiscal first quarter. The Japanese company’s foray into mobile games has also boosted its prospects. Nintendo has announced its first quarter results that exceed the Wall Street expectations by a huge margin.

Nearly 2 million Switch units sold during Q1

For the April-June quarter, Nintendo sold 1.97 million Switch consoles worldwide. It was near the high end of analysts’ projections of 1.8 million to 2 million units. It takes the total Switch sales to 4.7 million units. The company had sold 2.74 million Switch devices in March. The shipment numbers are strong considering it has been on the market for less than five months.

The Nintendo Switch console is on track to beat the lifetime sales of Wii U in less than a year. The Wii U was one of Nintendo’s worst selling consoles. It sold only 13.5 million units in its lifetime. Despite record-breaking sales numbers, Nintendo is keeping its Switch sales estimates at 10 million units for the full year, well below analysts’ expectations of 13 million units.

Nintendo doubles its revenue

The Japanese company said its Q1 revenues more than doubled to 154.1 billion yen ($1.37 billion), compared to analysts’ projections of 139 billion yen. It posted an operating profit of 16.2 billion yen ($145 million), beating analysts’ expectations of 10.6 billion yen in profits. Nintendo had incurred a loss of 5.1 billion yen in the same quarter a year ago.

The Switch demand got a further boost from the launch of new titles such as Mario Kart 8 Deluxe and Minecraft. Nintendo sold 8.14 million games to Switch customers during the quarter, taking the total number of games sold to 13.6 million. It means the company sold 2.9 games per console. Nomura analyst Junko Yamamura said it confirms that Switch users have “a strong appetite for software purchases.”

The Legend of Zelda: Breath of the Wild was the top-selling game at 3.92 million copies during the quarter. It was followed by Mario Kart 8 Deluxe (3.54 million units). The ARMS sold 1.18 million copies. Early reports suggest that the newly launched Splatoon 2 has also been doing well. The company has an impressive lineup of upcoming titles that should keep gamers interested.

Nintendo said its mobile app revenues jumped more than 450% YoY to 9 billion yen. The company has been diversifying its portfolio by foraying into mobile gaming. Many Wall Street analysts turned bullish after the quarterly results, mainly due to the stronger than expected software sales. Goldman Sachs analyst Masaru Sugiyama said, even though the Switch remains in short supply, users who got their hands on the console purchased more games than expected.

Nintendo Switch console to beat Xbox One this year

Considering the Nintendo Switch console is still hard to find in stores, the sales numbers could have been significantly higher had Nintendo maintained the supply. Recent reports suggest the company has asked its suppliers to double the annual production target to 20 million units. Nintendo badly needs to ramp up production ahead of the holiday shopping season.

The Nintendo Switch console is expected to be one of the hottest holiday gifts this year. We can now see an improvement in supply. The stockists have been releasing batches more frequently. Industry analyst Michael Pachter predicts that the Switch would outsell Microsoft’s Xbox One this year. Pachter expects the Switch to sell 14 million units compared to 10-11 million units for Xbox One.

An impressive lineup of upcoming titles

While many power-intensive games such as A Plague Tale: Innocence and Call of Duty: WWII won’t be coming to the Switch, the console will be getting several other cool games that will take advantage of its capabilities. Major League Baseball announced that it would launch R.B.I. Baseball 17 for Switch on September 5. It will allow for fast-paced and fun gameplay in all 30 ballparks with over a thousand MLB players.

Ubisoft also recently teased new games for Nintendo Switch. Ubisoft chief executive Yves Guillemot told investors during the company’s latest earnings call that Ubisoft was working to bring new titles to the Switch. Ubisoft may announce the new games at the Gamescom 2017 event next month. Earlier this year, the developer introduced Just Dance 2017 to the Switch.

The developer has already promised to launch multiple new titles for the Switch including Rayman Legends: Definitive Edition, Mario + Rabbids Kingdom Battle, Just Dance 2018, Monopoly, and Starlink: Battle for Atlas. It is unclear whether the new Assassin’s Creed Origins will come to the Switch. The title will be launched on October 27th on other consoles.

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