Nintendo doubles down on its commitment to the current Switch console as it announces record annual net profit, despite sliding hardware sales.
Nintendo Affirms Continued Support for Current Switch Console Well Until 2025 While Teasing Switch 2
Nintendo Maximizes Strong Sales of Current Switch Model
In its financial results for the year ending March 2024, Nintendo reported selling 15.7 million Switch consoles, surpassing its previous forecast of 15.5 million and bringing the total sales to 141.32 million units as of today, though recording it as a 2% decline of proportion of hardware sales compared to FY23.
Despite the decline in sales of the company's Switch console and its software titles in volume terms, the company's sales rose by 4.4% to 1,671.8 billion yen compared to the previous fiscal year, with operating profit increasing by 4% to 528.9 billion yen.
Nintendo recorded its total net profit at 490.6 billion yen increasing by 13.4% compared to FY23. The company attributed its healthy profit "mainly due to a substantial increase in foreign exchange gains and interest income," while attributing soaring net profit to the owners of Nintendo Co., Ltd.
Looking ahead however, Nintendo projected a 14% decline in Switch sales to 13.5 million units for the fiscal year ending March 2025, with a corresponding 38.9% decrease to 300 billion yen in net profit. Though Nintendo anticipated Switch sales to continually dip, it recorded a 1.1% increase in sales of the Switch OLED model, with Nintendo stating that the 123 million players recorded between April 2023 and March 2024 were the highest seen since Nintendo Switch was launched.
Sales of new Switch titles in the Zelda, Mario, and Pikmin series continued to be strong, as noted by the company. Its evergreen titles, including those released several years ago such as Mario Kart 8 Deluxe, Smash Ultimate, and Pokémon Scarlet and Violet, showed steady sales.
To maintain momentum, Nintendo stated it plans to release new titles and add-on content for the current Switch model, including games like Endless Ocean Luminous (May), Paper Mario: The Thousand-Year Door (May), and Luigi's Mansion 2 HD (June). While the company had initially delayed the launch of the Switch successor until March 2025 or later, it reaffirmed its commitment to the current Switch as its main business heading into 2024 to 2025.
"Another objective is to continually release new offerings so more consumers keep playing Nintendo Switch even longer and we can maximize hardware sales," the company stated. "Other software publishers also plan to release a wide variety of titles, and we will work to invigorate the platform by supplementing existing titles with a continuous stream of new titles and add-on content."
In line with this, Nintendo announced that the upcoming Nintendo Direct June 2024 will focus on introducing new titles for the current Switch for the latter half of 2024, confirming that "there will be no mention of the Nintendo Switch successor during that presentation."
The passing announcement of the Switch 2 was made well after Furukawa confirmed several months ago that Nintendo will focus on the current Switch. This prompted a decline in Nintendo's stock value earlier this year as newer investors became less patient with Nintendo's progress, with analysts suggesting that it could potentially impact the company's fiscal performance for the March 2025 fiscal year.
The CEO of game consultancy firm Kantan Games, Dr. Serkan Toto, suggested that Nintendo Switch could "have some strong software planned for later this year, based on its hardware sales forecast." "You never know with Nintendo, but it looks like they’re treating 2024 as a bridge year before the new console comes out," he told news site VGC.
"13.5 million units is a very aggressive target for hardware sales that late in the life cycle, so it either has some bangers to be released this fiscal or it will finally cut prices at some point in the near future," he concluded, additionally commenting that Nintendo has "a lot of work to do selling the current model" until at least March next year.
Source:
Nintendo: Financial Results Explanatory Material Fiscal Year Ended March 2024
Nintendo confirms it will announce its next console ‘this fiscal year’
