Most businesses report their financial results on a quarterly basis as an update on their performance throughout the year. While most of the jargon requires some background in accounting and finance to gain a full appreciation of, there are plenty of highlights for the casual fan, often in the form of sales numbers and key announcements.
In the context of Nintendo, we get a bunch of information about video game and console sales with some prompt insight. And with a strong interest in gaming and business, I love combing through everything Nintendo has to offer. Therefore, I am going to dive head first into the most interesting announcements and insights that will intrigue the industry veteran and Nintendo fan in equal doses.
We can address the elephant in the room first: the Nintendo Switch (Switch) has sold nearly 80 million units in the current fiscal year (precisely 79.87 million). Nearing four years on the market, it has exceeded the Nintendo 3DS’s (3DS) lifetime sales. To provide additional context, the 3DS debuted in 2011 and its production officially ended last September. Switch managed to eclipse the 3DS in less than four years, even considering that the 3DS has numerous editions that were generally affordable.
Within the current fiscal year, Nintendo has moved 24.10 million units. Year-to-year, this is the Nintendo Switch’s strongest performance to date. It also extended to the past quarter that alone moved 11.56 million consoles, accounting for a significant portion of lifetime sales. The persistence of COVID-19 into the holiday season and greater availability compared to PS5 and Xbox Series were no doubt factors that bolstered its potential. While the Nintendo Switch’s lifetime has a few more years on the horizon, 2020 might be the peak of the console’s sales.
Another interesting thing to note is the ratio of Nintendo Switch sales to Nintendo Switch Lite sales. It comes out at about 2.28:1, indicating that 2 Nintendo Switch consoles are sold for every Nintendo Switch Lite sold. Lifetime sales of Nintendo Switch Lite are sitting above 13 million consoles, roughly matching the lifetime sell-through of the Wii U.
One can also note from the report that 29 titles have sold a million copies. What is not explicit on this report is that 9 titles have sold 10 million copies. Before the end of the fiscal year, Super Mario 3D All-Stars and New Super Mario Bros. U Deluxe should join the club. Within those nine titles are Mario Kart 8 Deluxe and Animal Crossing: New Horizons, topping the charts with over 30 million units sold each. On the whole, the sales figures point to healthy attach rates across its software catalog.
Digital sales also experienced a boom compared to the same time period last year that brought it up to 256.0 billion yen (about 2.44 billion US dollars), further cementing the increasing appeal of purchasing video games and downloadable content through the Nintendo eShop. While the proportion of digital sales has not matched that of FY21/Q1, likely due to the onset of COVID-19 lockdowns, it is a net increase. Its growth can also be attributed to a greater slate of downloadable content and indie games that are available exclusively on digital platforms.
The permanent effects of COVID-19 on digital sales will manifest throughout 2021, and it should be noted that Nintendo does not report digital sales to the NPD group for their monthly reports. Therefore, its significant proportion indicates that Nintendo games are selling much better than NPD Group might report, and Animal Crossing: New Horizons might be the actual best-selling game of 2020.
Then we turn to the “other” revenue streams of mobile games and IP-related income. Once again there is a year-on-year increase bolstered from sustained monetization of past releases and potential royalties from licensing Nintendo IP to other brands (i.e. Lego). Pictured is Super Nintendo World, the Mario-themed amusement park set to open to the public in 2021. With an entire year to generate a new source income, there is a decent chance this metric increases in FY22.
All of this amounts to one thing: Nintendo just had its best quarter since 2008, during the era of the Nintendo Wii (Wii). As a result of dominant Nintendo Switch sales, diversified earnings potential, and the COVID-19 pandemic, Nintendo experienced a perfect conversion of scenarios that maximized the consumer base interested in entering and engaging with the Nintendo ecosystem.
On a final note, there was a Q&A session following Nintendo’s disclosure of their financial results. The big question of the session was whether or not a new Nintendo switch model would come out this year. Bloomberg tech reporter Takashi Mochizuki provided translations, and Nintendo president Shuntaro Furukawa claimed the company had nothing to announce soon given the new Super Mario and Monster Hunter editions releasing in the coming months.
Translation: We’re releasing a new model of Nintendo Switch this year, but we’re not ready to tell you all officially 🙂
Of course, my “translation” a hypothetical. However, the signs continue to point towards Nintendo releasing an updated model in the near future if gaming analysts and insiders are to be believed. Based on their wording, it appears likely that we’re looking at a Q3/Q4 release of a new Nintendo Switch.
And that’s a wrap! I am providing a link to Nintendo’s investors page that contains the pertinent information about company finances and sales numbers here for others to take a look at! On the whole, there’s a lot more information to consume about their tentative schedule for future game releases, key insights driving certain statistics, etc.
Thank you for reading! Please feel free to comment your thoughts on Nintendo’s performance over the past few months or beyond.