Nin­tendo lifts an­nual profit out­look

Ja­panese videogames maker re­ports strong de­mand for the Switch con­sole

The Star Malaysia - StarBiz - - Digital Trend -

TOKYO: Ja­panese videogames maker Nin­tendo Co Ltd raised its full-year oper­at­ing profit fore­cast as sup­ply short­ages on its new Switch games con­sole be­gan to ease.

Strong de­mand for the hy­brid home-por­ta­ble Switch con­sole, fol­low­ing the flop of pre­de­ces­sor Wii U, has led to a near-dou­bling of Nin­tendo’s stock price to nine-year highs since the de­vice’s March launch.

The games maker fore­cast profit of 120 bil­lion yen (US$1.06bil) for the year end­ing March, from 65 bil­lion yen es­ti­mated three months ago.

The new out­look is still be­low a Thom­son Reuters Starmine SmartEs­ti­mate of 133.60 bil­lion yen drawn from the pro­jec­tions of 22 an­a­lysts.

Nin­tendo also raised its an­nual Switch sales fore­cast to 14 mil­lion units from 10 mil­lion units.

“We’ve boosted Switch pro­duc- tion in or­der to meet strong de­mand from our cus­tomers as it was dif­fi­cult for cus­tomers to buy the con­soles at re­tail stores,” Nin­tendo pres­i­dent Tat­sumi Kimishima said at an earn­ings brief­ing yes­ter­day.

Nin­tendo sold about 2.9 mil­lion Switch con­soles in the three months through Septem­ber, bring­ing the cu­mu­la­tive to­tal to 7.63 mil­lion units.

The Switch’s early suc­cess has fu­elled hopes for strong earn­ings in the com­ing years for Nin­tendo, as solid de­mand for new con­soles is widely re­garded as a pre­lude to strong sales of high-mar­gin game soft­ware sales over sev­eral years.

The Switch, how­ever, is set for stiffer com­pe­ti­tion into the yearend hol­i­day shop­ping sea­son as Mi­crosoft Corp re­leases its high-pow­ered, high-res­o­lu­tion Xbox One X con­sole on Nov 7.

“The true power of the Switch would be tested dur­ing the up­com- ing hol­i­day sea­son,” Kimishima said.

Nin­tendo is try­ing to re­duce its re­liance on the con­sole busi­ness and sta­bilise fluc­tu­at­ing profit by mov­ing into new ar­eas for the com­pany such as smart­phone gam­ing and theme parks.

Its share price ended yes­ter­day 0.26% lower ahead of the earn­ings re­lease, com­pared with a 0.01% rise in the Nikkei bench­mark in­dex. — Reuters

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