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Nintendo Lifts Wages, Despite Forecasting 23% Profit Drop

Nintendo will raise salaries across the entire company by 10 per cent, despite forecasting a 23 per cent drop in profits this year.

The company announced the good/bad news overnight, saying it expects net profit to fall 22.5 per cent to A$4 billion for the year ending March, due to falling demand for Switch consoles.

This revised figure is some A$329,000 below its previous forecast, with Nintendo now expecting to sell 18 million Switch consoles for the fiscal year, one million less than previous forecasts, and down from the 21 million units the company sold in FY21.

Switch sales for the nine-months to the end of December 2022 dropped 21.3 per cent, to 14.91 units, as chip shortages continued to impact stock levels.

Production returned to normal level by October, but demand has since waned.

“Changes in consumer behavior due to inflation and more entertainment options in the post-COVID economic reopening is making it harder than in the past for Nintendo Switch consoles to be consumers’ first choice,” President Shuntaro Furukawa said at a press briefing.

Net income for the Japanese giant fell 5.8 per cent between April-December 2022, with sales down 1.9 per cent.

Despite all this, Nintendo is aware it needs to attract staff. Domestic salaries in Japan have risen by the fastest rate since 1997, and companies are racing to keep up.

“We expect that various companies will raise wages against the backdrop of high prices,” Furukawa said.

“It is essential for us to acquire excellent human resources in order to increase our competitiveness over the long term.”

Furukawa noted a 10 per cent hike across the board will help strength the company’s “hiring power” as it faces massive competition in attracting talent.

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