For three consecutive fiscal years from April 2018 to March 2021, Nintendo maintained stable revenue and profit growth. This kind of "steady rise" is not seen in other game listed companies in Japan. However, this momentum has reached an inflection point in fiscal 2022. Of course, the responsibility is not within Nintendo.
Judging from the latest first quarter of fiscal 2023, it may take some time to recover.
On August 3, Nintendo announced its results for the first quarter of fiscal 2023 (April-June 2022), with revenue of 307.4 billion yen, down 4.7% year-on-year; Operating profit was JPY 101.6 billion, down 15.1% year-on-year. Current profit was JPY 166.7 billion, up 29.6% year-on-year. Net profit was JPY 118.9 billion, up 28.3% year-on-year.
Nintendo said that due to the lack of global semiconductor parts supply, Switch's hardware production could not be carried out as planned, and the company's performance was forced to reduce revenue and depreciation. The good news is that Nintendo expects the problem to slowly improve from late summer to early fall.
Overview
Revenue from console-related businesses was JPY 295.6 billion, down 4.3% year-on-year. Revenue from mobile and IP businesses was JPY10.9 billion, down 16.8% year-on-year. Revenue from other businesses was JPY 800 million.
It is worth noting that Nintendo's overseas revenue accounted for 79.9%, which is higher than the data for fiscal 2022. Among them, the Americas accounted for 43.8%, the European region also accounted for 26.1%, Japan accounted for 20.1%, and other regions accounted for 10.0%.
Switch hardware
In the first quarter of fiscal 2023, hardware sales of the Nintendo Switch saw a sharp decline, and the switch endurance enhanced version, Switch OLED and Switch Lite three models ushered in a new sales ratio.
Specifically, sales of Nintendo Switch hardware fell 22.9% year-on-year to only 3.43 million units in the quarter. Switch OLED sold 1.52 million units to further widen the gap with the Switch Endurance Enhanced Edition, consolidating the position of the main model. The Switch Endurance Enhanced Edition sold 1.32 million units, down 60.0% year-on-year. Switch Lite sales also fell 48.4% year-on-year to 590,000 units.
It should be noted that sales of 3.43 million units in a single quarter are the lowest point since the outbreak of the epidemic. However, Nintendo did not hesitate to say that the production environment of hardware is improving, and in the face of the Year-end Christmas business war, it will use a more efficient way to try to deliver more Switch hardware to the world.
As of June 30, the switch series of consoles has reached 111 million units worldwide. The number of Switch users also rose from 16 million in fiscal 2018 to the latest 140 million.
According to the judgment, Nintendo expects the hardware sales of the Switch to reach 21 million units during fiscal 2023, down 8.9% year-on-year. The first quarter is only about 16.3% of the fiscal year plan, and the real focus will start from the end of the year Christmas business war.
Switch software
Like hardware, Nintendo's gaming software sales in the first quarter also fell 8.6 percent to 41.41 million copies.
There are 4 games that sold more than 1 million in a single quarter. In addition to the record 4.84 million copies of Nintendo Switch Sports, which was released in April, Mario Striker: Battle League, which was released in June, also sold 1.91 million copies; In addition, as a new tour in the non-quarter, "Kirby of the Stars" sold 1.88 million copies, with cumulative sales reaching 4.53 million; Evergreen's Mario Kart 8 Deluxe Edition added 1.48 million units to sales, and the cumulative sales have reached a terrifying 46.82 million.
Among them, the cumulative sales of "Nintendo Switch Sports" exceeded 4 million copies worldwide after 10 weeks of release, and the sales curve was relatively stable, which was a long-term product; Released on March 25, 15 weeks after the release of "Kirby of the Stars", the cumulative sales volume of "Kirby of the Stars" exceeded 4 million units worldwide, becoming the most successful work in the 30 years since the birth of the "Kirby of the Stars" series of IP.
New plan
This earnings report also mentions the progress of several recent new games of Nintendo, as well as the limited Edition console launch plan:
Blade 3 was released on July 29;
Mario Kart 8 Deluxe Edition Paid DLC Track Adds 2nd Bullet, which will debut on August 5;
The digital download version of Kirby's Food Festival will be available this summer;
Splatoon 3 is scheduled to go on sale on September 9. Prior to the release of the game, on August 26, Nintendo will be the first to release the "Jet Warrior 3" limited Switch OLED console set.