Nintendo this morning confirmed a blockbuster launch for its new Switch hybrid console — reporting 2.74 million units sold from its March 3 debut to the end of the month. To put that in perspective, that’s more than Nintendo’s previous console, the Wii U, sold in its first fiscal year on the market.
The initial Switch results represent a “promising start” for the new console, the company said in its earnings report this morning for the fiscal year ended March 31. The flagship Switch game, “The Legend of Zelda: Breath of the Wild,” actually did better than the console itself, with 2.76 million units sold, according to the company.
Nintendo, which has its North American headquarters in Redmond, Wash., reported operating profit of 29.4 billion yen ($263 million) for its fiscal year, and said it expects profits to more than double to 65 billion yen ($584 million) in the new fiscal year. That forecast is less than analysts were expecting. Reuters reports that Nintendo President Tatsumi Kimishima cited plans to increase marketing spending for the Switch as one reason for higher-than-expected costs.
The Switch’s selling point is its flexibility: it is essentially a tablet that can be docked at a TV for gaming at home but also converts to a mobile gamepad so players can take their games on the go.
Here is the company’s full summary of its fiscal year ended March 31, from its earnings report. Also note the reference to Nintendo’s financial gain from the sale of its majority stake in the Seattle Mariners baseball team.
Nintendo Switch, a new home console system that diversifies the ways you can play games, launched during this period on March 3 worldwide and is off to a promising start. In particular, The Legend of Zelda: Breath of the Wild has won immense popularity with recorded sales of 2.76 million units (the total units sold including the Wii U version is 3.84 million units) and 1-2-Switch has been generating buzz. Both of these games were released at the same time as the hardware. The sales volume for hardware and software during this period reached 2.74 million units and 5.46 million units respectively.
Sales volume for the Nintendo 3DS software also grew favorably. In addition to Pokémon Sun and Pokémon Moon, which released worldwide in November and generated a tremendous amount of buzz with recorded sales of 15.44 million units, Super Mario Maker for Nintendo 3DS sold 2.34 million units and Kirby: Planet Robobot sold 1.36 million units. The release of the smart device application
Pokémon GO led to increased sales of software in the Pokémon series and drove the Nintendo 3DS family hardware sales growth outside of Japan. The worldwide sales volume for the Nintendo 3DS hardware this period was 7.27 million units (7% increase on a year-on-year basis), while the Nintendo 3DS software sales volume reached 55.08 million units (14% increase on a year-on-year basis).
For Wii U, while The Legend of Zelda: Breath of the Wild released worldwide in March and reached sales of 1.08 million units, the Wii U software sales volume during this period was 14.8 million units (46% decrease on a year-on-year basis) and hardware sales were in alignment with our expectations at the start of the fiscal year, decreasing to a sales volume of 760 thousand units (77% decrease on a year-on-year basis).
On the smart device front, we released Super Mario Run, a new action game application featuring Mario, in December for the iOS and March for the Android. This title elicited a fantastic response from consumers worldwide. Furthermore, we released Fire Emblem Heroes, a full-fledged simulation RPG game application that can be enjoyed casually on smart devices, in February. The game is being enjoyed by both long-time fans of the Fire Emblem series and consumers who have never played the series on dedicated video game systems.
The Nintendo Entertainment System: NES Classic Edition also launched in Japan and overseas in November to widespread popularity. Although the release of some new titles offering amiibo functionality restored some momentum, amiibo sales remained limited to 9.1 million units for figure-type and 9.3 million units for card-type. In addition, there were relatively fewer offerings of downloadable content during this period, so digital sales were also down to a large extent on the same period last year.
These factors resulted in an operating profit of 489.0 billion yen against net sales of 29.3 billion yen (of which 359.0 billion yen, or 73.4% of the total sales, were overseas sales). We have also included 50.3 billion yen share of profit of entities accounted for using the equity method related to The Pokémon Company and other investments, resulting in an ordinary profit of 20.2 billion yen. In addition, due to the sale of part of our equity in the company that manages the Seattle Mariners Major League Baseball team, we recorded gain on sales of investment securities totaling 64.5 billion yen as extraordinary income, meaning that the net profit attributable to owners of parent was 102.5 billion yen.
And here is the company’s outlook for the upcoming year.
Regarding Nintendo Switch, we will maintain buzz about The Legend of Zelda: Breath of the Wild and 1-2-Switch, which are off to a phenomenal start, and release Mario Kart 8 Deluxe in April and ARMS in June worldwide. We will release Splatoon 2 in July. Splatoon 2 exemplifies the concept of Nintendo Switch, enabling consumers to play anywhere, anytime, and with anyone, and will bring competition between consumers to new levels of excitement. In addition, we will maintain favorable conditions surrounding Nintendo Switch by providing a continuous stream of appealing third-party titles across varying genres. We aim to stimulate the platform and expand sales going into the holiday season this year.
Total sales volume for the Nintendo 3DS hardware worldwide has surpassed 66 million units and it has developed into a platform that we can rely on for software sales.
We will release Fire Emblem Echoes: Shadows of Valentia overseas in May (April in Japan) and plan to release Ever Oasis and Hey! Pikmin in June and July. Furthermore, this year is Kirby’s 25th anniversary, so we are planning to release downloadable titles and a new multiplayer action game for Nintendo 3DS. Third-party developers have also announced major titles for Nintendo 3DS. During this period we will continue striving to maintain the momentum of the platform and to reach a broader audience, including females and children, across the world.
In the smart-device business, we released three game applications during this period, each with different playstyles and profit models. We were able to present opportunities for consumers who had never played Nintendo games before and those who live in regions we had previously been unable to reach to experience Nintendo’s intellectual property (Nintendo IP) and the different worlds featured in Nintendo games. Going forward we will endeavor to expand our smart-device business by making use of the experience we have gained so far to provide new game applications, while also focusing on continued operations for our released applications so that consumers can enjoy playing them for a long time.
