We have done a lot of things to raise awareness about how the Switch experience can offer something new, and I am just relieved that consumers seem to have accepted it, the companys chief executive Tatsumi Kimishima said of the console designed for use both in the living room and on the go.
The Switch posted solid March sales of 2.74 million units, beating the companys initial sales estimate of two million units for the month. The scale of the Switchs success in March surprised the market, analysts said, given that the launch missed the year-end holiday season, Nintendos biggest profit-generating period.
Nintendos 10 million forecast is too cautious and more than 15 million units could be sold during the current fiscal year, Ace Research Institute analyst Hideki Yasuda said.
For the 12-month period beginning this month, Nintendo expects to see operating profit of ¥65 billion yen ($585 million) on revenue of ¥750 billion, the company said. A result in line with its expectations would be a good improvement over the ¥29.4 billion profit for the year that ended March 31, which Nintendo also reported Thursday.
The projected ¥65 billion operating profit, if realized, would be the highest since the year ending March 2011. Analysts say Nintendo should typically generate operating profit of more than ¥100 billion, but profits have declined in recent years because of the weak performance of the Wii U console.
Mr. Kimishima said Nintendo would be spending more this year on promotion to sell the Switch, putting a drag on operating profit.
It is surprising that Zelda is doing so well, but it also proved what we have been saying is right: A good game title will spur sales of the platform device, Mr. Kimishima said.
Analysts are more optimistic about Nintendos earnings prospects than the company. Macquarie Capital Securities analyst David Gibson said he expects Nintendo to earn ¥137 billion operating profit in the current fiscal year, assuming it sells more than 14.5 million Switches over the period and receives revenue contributions from Nintendo-made game software for the Switch and smartphones.
For the year that ended in March, Nintendo said it had recorded a net profit of ¥102.6 billion, compared with the street forecast of ¥93.6 billion. Net profit was helped by ¥64.5 billion from selling part of the stake in the Seattle Mariners operator it owned. The company booked net profit of ¥16.5 billion in the year-earlier term that ended March last year.
