Nintendo hopes key games like Mario and Zelda will help it keep gamers interested in its aging series of Switch consoles.
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nintendo announced lower profits and revenue in its fiscal year due to lower sales of its flagship Switch console.
For its full fiscal year, which ran from April 2022 and ended on March 31 this year, Nintendo reported revenue of 1.6 trillion yen, in line with its own forecast. . This is a decline of 5.5% year over year.
Nintendo reported net profit of 432.7 billion yen for the financial year, down more than 9% year-on-year. However, it was better than the company’s own forecast of 370 billion yen.
The Japanese gaming giant sold 17.97 million units of its flagship Nintendo Switch console series, in line with its own forecast of 18 million units for the fiscal year. This compares to just over 23 million Switch units sold in the fiscal year ending March 2022, a decline of 22%.
Nintendo said “shortages of semiconductors and other components impacted production well into late summer” and the company “didn’t see sales growth primarily during the season. parties” that she experienced the previous year.
For the fiscal year ending March 2024, Nintendo forecast sales of 15 million units of the Switch.
Nintendo is grappling with an aging console with the Switch, which has been on the market for six years, with investors fearing its sales may have peaked. The company was twice forced to cut its Switch sales forecast in the past fiscal year after a disappointing holiday season.
Over the life of the Switch, Nintendo attempted to refresh the console with a handheld version and one with an improved screen. This helped in the short term, but did little to stop the overall downward trend in sales.
On the other hand, rival sony posted a record profit for the year ended March 31. The company also sold a record 19.1 million PlayStation 5 consoles during the fiscal year. Sony’s PlayStation 5 has only been on sale for a little over two years, so it’s still in its infancy.
Nintendo shares are up 3.6% this year while Sony shares are up 25%.
“The Nintendo Switch has had a fantastic run but is definitely past its prime,” Serkan Toto, CEO of Tokyo-based games consultancy Kantan Games, told CNBC.
“Based on the forecast for the new fiscal year (year), I wouldn’t expect miracles, but rather a company operating on autopilot and fulfilling its duty to existing Switch users. Every console cycle ends up end, and Nintendo too, now needs new hardware to revitalize its sales.”
The key for Nintendo now is how it continues to generate revenue from its 114 million annual paying users. The gaming giant offers a wide range of recognizable games and characters, from Pokemon to Mario.
However, Nintendo said software sales totaled 213.96 million units for the fiscal year ended March 31, down 9% year-over-year.
Nintendo is set to release The Legend of Zelda: Tears of the Kingdom, one of its most popular franchises, on Friday.
The company expects software sales of 180 million units in the current fiscal year, marking expectations of a further decline.
Nintendo said it expects net profit to fall 21.4% to 340 billion yen in the fiscal year ending March 2024.