Nintendo reported a surge in revenue and operating profit for the June quarter boosted by the success of the “Super Mario Bros. Movie” and the the popularity of its latest Zelda game for the Switch console.
Here’s how Nintendo did in its fiscal first quarter versus Refinitiv estimates:
- Revenue: 461.34 billion yen ($3.2 billion) versus 395.40 billion yen expected.
- Net profit: 181.02 billion yen versus 109.91 billion yen expected.
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Nintendo’s revenue 50% from a year ago while net profit surged by 52%. Operating profit came in at 185.44 billion yen, ahead of expectations, jumping 82.4% year-on-year.
Prior to the fiscal first quarter, Nintendo had seen two straight quarters of revenue and
Nintendo saw a boost from the “The Super Mario Bros. Movie,” based on the company’s best-known characters, which has generated more than $1 billion at the box office since its April release. The film was produced by Universal Studios.
The Japanese gaming giant also released a highly-anticipated game called “The Legend of Zelda: Tears of the Kingdom” in May, which it said was the fastest selling title in the history of the series.
“In the first quarter of this fiscal year, both sales and profits were notably large for a first quarter mainly due to the concurrent releases of ‘The Super Mario Bros. Movie’ and ‘The Legend of Zelda: Tears of the Kingdom’, and we made steady progress toward our full-year earnings forecast,” Nintendo said in an earnings release.
Nintendo previously forecasted its revenue for the current fiscal year, which ends in March 2024, at 1.45 trillion yen and 340 billion yen of profit.
Switch refresh in focus
Nintendo also previously forecast sales of 15 million units of its flagships Switch games console series for its current fiscal year ending March 2024. That compares with just under 18 million units sold in the previous fiscal year.
The company said that it sold 3.91 million Switch consoles in the June quarter, up by 13.9% on the year.
Chris Pratt and Charlie Day voice Mario and Luigi in Universal and Illumination’s “The Super Mario Bros. Movie.”
Universal
The Switch is now a more than six-year old console, with investors fearing buyers’ interest may have peaked — but the rise in sales may help to allay some of those concerns. The quarter highlights Nintendo’s ability to continue to generate revenue from its 116 million of annual playing users and perhaps extend the longevity of the Switch.
Over the life of the popular console, Nintendo has tried to refresh it with a handheld version and with one with an improved screen. But speculation continues on whether Nintendo will release a new version to breathe fresh life into the device and the company.
Analysts at Jefferies said in a note in April that the company will likely release a refreshed version of the Switch in this current fiscal year, or the next such period, which starts in April 2024. But the timing will depend on how well Nintendo’s overall financial performance is, and whether the company will need a new Switch to help boost sales over this year or the next.
The Mario and Zelda effect
The Mario movie benefitted various parts of Nintendo’s business, creating a halo effect that drove users to the Japanese gaming giant’s products. Nintendo said the film supported sales of games featuring the famous Italian plumber, including Mario Kart 8 Deluxe.
It also helped Nintendo rake in 31.8 billion Japanese yen in June quarterly revenue for its mobile and intellectual property-related business — a rise of 190% year-on-year.
“The Legend of Zelda: Tears of the Kingdom” was another big factor in Nintendo’s bumper quarter. The latest game in the Zelda franchise sold 18.51 million units in the quarter.
Mario and Zelda pushed Nintendo to post a 26% year-on-year rise in software sales to 52.21 million units.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC.