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June Quarter Online Sales Ease Nerves At Nintendo

Nintendo has outperformed earning estimates thanks to better than expected online sales figures, rewarding shareholders with a 3.1 percent bump.

The renowned Japanese video game company reported a 30.5 billion yen ($368 million AUD) profit, beating the 2536 billion yen estimate.

Forecasts for profit, hardware and software sales are being kept steady on the back of the positive news, despite weaker than anticipated Switch sales.

Nintendo will use the results to push back against bad sentiment in the market, especially after short sellers were targeting the stock and destroying gains over the past year.

The game maker will use the forward momentum within the software branch to focus on upcoming launches including their online game service.

As for the numbers, 18 million Switch software titles were sold over the previous year, up from 8.1 million last year.

1.9 million hardware units were sold, a minor decrease from the 2 million sold last year in the relevant quarter.

Average games bought within the quarter for the Switch dropped to 0.9 per person from 1.7 in the previous year.

Switch’s eShop has been the big earner both due to an increase in sales and the higher margins digital purchases allow for.

Nintendo raked in 18.5 billion yen, up 68%, from eShop purchases alone, making up 11% of total revenue.

Looking forward, Nintendo has a few challenges ahead to convince the market that they can continue to grow.

Poor perception of their upcoming releases at the last E3 spooked investors earlier this year but the new figures demonstrate that Nintendo can do just fine on tentpole IPs and re-releases.

Preparation for Christmas has already begun, with announcements for Super Smash Bros and Pokemon underlining their December sales push.

Labo units, physical dolls that can be paired with Nintendo hardware for a combined virtual/real gaming experience only sold 1.4 million users, or 7 percent of Switch owners.

Mobile gaming has been a quiet earner for the company, making 9.1 billion in sales.

Historically, Nintendo has been apprehensive of entering the mobile gaming market, but with the release of Super Mario Run and the announcement of Mario Kart Tour it looks like there may be a future in phones after all.


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