Nintendo profit, sales top estimates on robust Switch platform demand

Nintendo Co.’s Switch is showing signs of becoming a money earner.

The Kyoto-based company reported profit and sales that topped estimates as more people bought the new gaming machine, lifting prospects for brisk shipments during the holiday season. Operating profit for April-June, the Switch’s first full quarter on store shelves, was $145 million, exceeding analysts’ average projection as revenue more than doubled.

Nintendo is betting that the Switch will fuel a new era of growth as more people embrace its dual role as a gaming device that can be used at home, or on the go. That’s also raised questions over whether the company is abandoning its two-gadget strategy of selling consoles and handheld gaming devices. While sales have been solid, analysts and investors are looking for signs that Nintendo will boost production or forecasts.

“The reason profit beat estimates is of course the Switch,” said Keiichi Kozera, an analyst at Tachibana Securities Co. “But it still feels as if they can grow unit sales some more. With the summer holidays approaching, I think sales will increase.”

Currency gains also helped to boost profit, after the yen fell 10 percent against the euro during the quarter, adding 7.1 billion yen to the bottom line. The game maker gets about a quarter of its revenue from Europe. The shares of Nintendo rose 2.8 percent in Germany. The stock is up more than 50 percent since the Switch went on sale.