Nintendo has released its financial results for the first quarter of its 2020 fiscal year. Net sales saw an increase of 2.4% (172,111 million yen versus 168,157 million yen for 2019 first quarter). Despite this increase in sales, the company made less profit. Operating profit was down 10.2%, ordinary profit was down 49.3% and profit attributable to parent was down 45.7% year-over-year.
The reasons for the lower profit appears to be a variety of factors, including an increase in selling, general and administrative expenses. But, perhaps the biggest reason is the foreign exchange loss for the first quarter versus a foreign exchange gain the prior year. Japanese companies like Nintendo that do the vast majority of its business overseas often have issues with the fluctuating currency prices, and this go round it wasn’t in their favor.
From April 1, 2019 through June 30, 2019 Nintendo managed to sell 2.13 million Switch systems (up 13.2% over last year) for a total lifetime sales number of 36.87 million. Nintendo is forecasting 18 million Switches sold for its fiscal year, ending March 31, 2020. 22.62 million pieces of Switch software (up 25.9%) sold in the 3 month period and Nintendo is forecasting about 210 million to be sold during the fiscal year.
Super Mario Maker 2 is already a multi-million seller with 2.42 million sold from June 28 – June 30. Mario Kart 8 Deluxe managed to shift another 1.2 million units during the three month period, bringing its total sell-in to 17.89 million. Digital sales of games continues to impress with 30.6 billion yen’s worth sold in the three month period, up 65.3%.
3DS is pretty much a dead system, selling only .2 million systems (44.9% decrease over last year). Software was equally abysmal with only 1.48 million games sold (49.7% decrease). Nintendo is continuing to insist that 3DS will be purchased by new customers drawn to its evergreen titles, but with the Switch Lite launching on September 20 for the same price as a New 3DS XL, we’re just not sure there’s much of a market for the 3DS any longer. We doubt many retailers will continue to devote shelf space to a system that’s pretty much done.
Overall Nintendo seems to be delivering on what they forecast for the fiscal year thus far. They reiterated the vast lineup of games coming out for the rest of the year. With a solid slate of Switch titles on the way and the Switch Lite hitting that coveted $199 price point, it looks like Nintendo is sitting pretty going into this holiday season with a fantastic value proposition and a fantastic library of games to back it up.