Switch sales help Nintendo beat profit expectations

Nintendo has recorded a 26 per cent jump in operating profit in its third quarter today, driven by strong sales of its Switch console.

The figures

The video game giant reported an operating profit of ¥158.6bn (£1.11bn) in the three months to the end of December, up 26 per cent on the same period a year ago and outpacing the ¥149bn prediction from a Refinitiv survey of analyst estimates.

Meanwhile profits before tax climbed 15 per cent year on year to ¥148bn on net sales that stood 20 per cent higher at ¥608.4bn as sales of the Switch surged over the key Christmas period.

Why it's interesting

Nintendo booked 9.41m sales of its flagship console in the three months to the end of December, far higher than the 7.23m it sold last Christmas.

However, the games giant looks likely to miss its ambitious goal of 20m units in the current financial year, having sold 14.5m for the first three quarters.

Big releases – like Super Smash Bros Ultimate selling 12m units and Pokemon: Let's Go shipping 10m copies – boosted Switch sales over Christmas, alongside sales of 94.6m software units, but Nintendo has fewer major titles planned for 2019.

As hardware sales of the Nintendo 3DS declined 60.5 per cent year on year to 2.31m units, analysts have speculated that Nintendo may look to release an alternative to make up for the drop.

What Nintendo said

“While it’s true demand fell more than we expected, for children playing for the first time the 3DS is light and has an advantage in price terms,” chief executive Shuntaro Furukawa told Reuters.

“We want to continue with both the 3DS and the Switch.”