Nintendo's Profit Drops 55% in Q2 2023
Nintendo, the Japanese video game giant, reported a significant drop in profit for the April-June quarter of 2023. Compared to the same period last year, profits fell by 55%, reflecting a decline in both hardware and software sales.
The company attributed the decline to several factors. Firstly, the Nintendo Switch, now in its eighth year, is experiencing a natural sales slowdown after its initial launch success. Despite selling over 140 million units, quarterly sales of the console dropped by 46% year-on-year.
Secondly, software sales also declined by 41% despite the release of several popular titles, including a new Super Mario game and a Luigi game. However, Nintendo emphasized that these declines were partly due to exceptionally strong results in the previous year, boosted by the release of a Super Mario Brothers movie.
Looking ahead, Nintendo remains optimistic. The company is banking on its strong intellectual property, including Mario, Donkey Kong, and Zelda, to drive future growth. Several new games in these franchises are planned for release in the coming months. Additionally, Nintendo is expanding its physical presence with the opening of a Nintendo Museum in Kyoto and a Nintendo store in San Francisco.
Despite the profit decline, Nintendo's performance remains in line with analyst expectations. The company maintained its profit forecast for the fiscal year ending March 2024 at 300 billion yen ($2 billion). However, the weakening U.S. dollar against the yen could pose a challenge, as it reduces the value of overseas earnings.