Nintendo of Japan is expected to extend its decade-long
winning streak by releasing fourth quarter results next week, powered by the
highly successful Switch console, which is expanding its reach among blocked
consumers.
Nintendo will post an 80% increase in operating profit on May 7 to 54 billion yen (about 3.8 billion rupees) in the January to March quarter, according to an average of 10 analyst estimates in a survey from Refinitiv, a quarter. Last quarter's profit level, seen at the height of the Wii console.
The recipe will provide official figures for the first 12 days of sales of the Animal Crossing: New Horizons island life simulator, which has proven to be a worldwide success as it attracts casual players trapped at home due to the coronavirus outbreak.
The virus is proving to be a boon for home entertainment, but it is extending Nintendo's narrow supply chain, exacerbating the scarcity of the portable hybrid device for home use, the Switch Lite version, just portable, and hard copies of the games.
In addition to the hardware supply limitations, Nintendo offered few details about upcoming titles, leaving an unusually empty release list that risks reducing sales momentum in the current financial year.
The coronavirus outbreak is hampering game development worldwide, with major release dates for rival Sony's Playstation 4.
Sony and Microsoft plan to launch next-generation game consoles by the end of the year, offering new competition for the Switch in its fourth year on the market.
Nintendo sees 19.5 million units of Switch hardware sold in the year ending in March, a figure widely seen as the latest example of the company's traditionally conservative forecast: it had already sold nearly 18 million units by the end of December.
The popularity of Animal Crossing, an important starting point in Nintendo's efforts to boost console penetration beyond hardcore gamers, helped lift the company's stock by almost 40%, from its lowest point in mid-March, where it sank due to concerns about future growth drivers.
The activist company ValueAct Capital Partners acquired a stake of $ 1.1 billion (about 8.2 billion rupees) in April, arguing that Nintendo could expand its audience, echoing investors' long-term frustration with the reluctance of the company to adopt alternative points of sale for its list of popular characters.
The expansion to mobile devices, which could help offset the cyclical console business, surpassed the company's guidance on title release numbers, with a highly anticipated version of the Mario Kart marquee series smartphones. inferior performance, hampered by the initial lack of a multiplayer option.
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