Japan's Nintendo seen posting bumper profit as fans await pipeline update
Reuters
Published Aug 05, 2020 00:07
By Sam Nussey
TOKYO - Japan's Nintendo Co Ltd (T:7974) on Thursday is expected to post a 160% jump in first-quarter operating profit as its hit Switch console and titles like Animal Crossing: New Horizons look set to extend a decade-high earnings streak.
The escapist island life simulator became a major hit as its delayed release coincided with consumers staying home due to the coronavirus outbreak, boosting the gaming firm's earnings in a year with a thin pipeline for major Switch titles.
In what is normally a lean quarter, Nintendo is seen posting an April-June profit surge at 71 billion yen (512.62 million pounds), according to Refinitiv SmartEstimate, based on the estimates of 12 analysts. That would compare with 27.4 billion yen a year earlier.
Sales of Animal Crossing likely reached 8 million units in the quarter, said Citigroup (NYSE:C) analyst Kota Ezawa, who sees total sales for the title reaching 20 million units.
Momentum for the Kyoto-based gaming firm, whose shares hit a 12 year high in July, is being tempered by worldwide shortages of the hybrid home/portable Switch and portable-only Switch Lite.
The system also lacks forthcoming marquee titles following the surprise release of Paper Mario: The Origami King in July just two months after the title was announced.
"Even if they announce a big first-party game tomorrow, the release is going to be at least two months away," said Serkan Toto, founder of game industry consultancy Kantan Games.
(GRAPHIC - Nintendo Switch's thin games roster: https://tmsnrt.rs/2Dts3oW)
Upcoming titles that Nintendo has flagged, including a sequel to Switch launch title Legend of Zelda: Breath of the Wild, have no firm release dates.
With critical mass from its Switch install base of over 55 million units, Nintendo is attracting third-party gaming firms such as Electronic Arts Inc (O:EA) which is set to release FIFA 21 Legacy Edition on the system in October.
The Switch dominates Nintendo's earnings. A push into mobile gaming is stuttering with just a single title, Mario Kart Tour, released this year and underperforming expectations.
Get The App
Switch sales in Japan topped 100,000 units last week, industry magazine Famitsu said, in an indicator of possible easing of the supply bottleneck.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.