Honolulu Star-Advertiser

Friday, December 6, 2024 74° Today's Paper


Top News

Nintendo cuts annual profit forecast 10% as Switch sales slow

REUTERS/SARAH MEYSSONNIER/FILE PHOTO
                                The Nintendo logo is seen at the Paris Games Week, a trade fair for video games in Paris, France, on Oct. 27.

REUTERS/SARAH MEYSSONNIER/FILE PHOTO

The Nintendo logo is seen at the Paris Games Week, a trade fair for video games in Paris, France, on Oct. 27.

TOKYO >> Nintendo cut its operating profit forecast for the year to March 2025 by 10% to 360 billion yen ($2.36 billion) on Tuesday, as sales of its aging Switch console lost steam.

The forecast is below analyst estimates for a profit of 391.4 billion yen.

The Kyoto-based gaming company sold 4.7 million Switch consoles in the first half of the financial year, down from 6.8 million units in the same period a year earlier.

Nintendo lowered its full-year sales forecast for the console, which is in its eighth year on the market, by 7% to 12.5 million units. That would be down 20% from actual Switch sales of 15.7 million units a year earlier.

It also revised down its annual software sales forecast by 3% to 160 million units.

“For a platform that is in its 8th year in the market, both hardware and software enjoy stable demand and brisk sales,” Nintendo President Shuntaro Furukawa said at an online press conference.

“But sales so far fell short of our original projections. Taking into consideration their sales in the first half, we revised our forecasts for both hardware and software, and that led to the earnings revision.”

Furukawa said there was no change to Nintendo’s plan to announce a successor to its long-lasting Switch console in the current financial year to March, but did not go into specifics.

Toyo Securities analyst Hideki Yasuda said Nintendo shares could remain under pressure in the near term as the announcement on the new console, a major catalyst for the stock, seemed unlikely by the end of the calendar year.

“Making an announcement this year has gotten quite difficult … You would not want to divert attention to an upcoming console in the middle of the critical year-end shopping season,” Yasuda said.

Shares in Nintendo closed down 3.9% ahead of the earnings announcement, underperforming the Nikkei average’s 1.1% gain.

By participating in online discussions you acknowledge that you have agreed to the Terms of Service. An insightful discussion of ideas and viewpoints is encouraged, but comments must be civil and in good taste, with no personal attacks. If your comments are inappropriate, you may be banned from posting. Report comments if you believe they do not follow our guidelines. Having trouble with comments? Learn more here.