Nintendo results exceed expectations

Nintendo has presented quarterly financial results that have exceeded analysts’ forecasts, thanks to the record sales of its own games such as the latest Zelda and the pull of other of its franchises such as Mario.

Nintendo’s results are a good thermometer to measure the video game market. The world’s first entertainment industry exceeds the combined income of cinema and music, and offers spectacular business figures. And they are not only consoles, since a good part of PCs, components, peripherals and accessories are sold thanks to the ‘Gaming’ label.

You only have to remember the colossal 69,000 million dollars that Microsoft will pay to acquire Activision Blizzard King to understand the importance of this market that goes far beyond ‘games’.

Nintendo continues to rise

Operating profit for the last fiscal quarter increased by 82% over the previous yearup 185.4 billion yen ($1.36 billion) with total revenue of 461.3 billion yen ($3.23 billion).

Nintendo sold nearly four million units of its Switch console in the first quarter of 2023, for a substantial year-over-year increase. Much of the “fault” lies with the game ‘The Legend of Zelda: Tears of the Kingdom’, a bestseller that delivered 18.51 million copies in just one quarter, which is a new record for Nintendo’s own software. The game has a score of 96 out of 100 on review aggregator Metacritic, indicating universal acclaim.

Investor confidence has also been boosted by the huge success of “The Super Mario Bros. Movie”, which until recently led the world box office this year. Sales in its business related to mobile devices and intellectual property have also increased, up to 31.8 billion yen (221.46 million dollars), which means tripling the business figures.

As for hardware, Nintendo is managing to extend the life of its Switch console. Nintendo shares have generated a return of more than tripleincluding dividends, since the Switch went on sale in major markets in March 2017, outperforming the benchmark Nikkei index by 91%.

Its continued success is surely due to its possibilities for mobility in a segment of the handheld market boosted by the release of Valve’s Steam Deck and other handheld consoles. And it is remarkable, since it is the machine with the least hardware level of its generation and yet it is the most profitable by far from the PS5 or the Xbox series.

Analysts expect a great launch in 2024. A Nintendo Switch 2 that should be the basis for the growth of the Japanese company, a great world reference in the great video game market.

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