Nintendo keeps blowing one quarter after another. Analysts quote it is going to need new games and hardware to keep that momentum going.
On Monday, Nintendo, a Japanese company stated $2.2 billion (229.7 billion yen) for the quarter ended December in operating profit topping analyst expectations. During crucial holiday season sales of its Switch console reached a record high of 11.6 million units.
Since November, the best-selling Switch encouraged the company to increase its sales and earnings estimates for the second time. It now predicts a 24% jump in profit just three months ago. It is expected to reach 560 billion yen ($5.3 billion) in the year ending in March. The outcomes show that people are still turning to the Switch in droves even many months into the pandemic.
Nintendo earlier projected that it would sell 19 million console units for the year ending in March. It now thinks to sell 26.5 million after several upward modifications to the forecast.
Rise after the pandemic
Nintendo has been a huge conqueror of the pandemic-hit economy as more people linger to snap up its games and devices to help them stay entertained at home. Last year, the company’s profits ascended, sometimes at margins higher than 400%.
Nintendo traded 19.4 million copies of the game “Animal Crossing: New Horizons” in the last nine months of 2020. The game, which is set on a relaxing virtual island utopia and permits users to fish, catch bugs and play with friends on the beach, runs on the Switch and has become a best-seller. It brought the entire sales to about 31.2 million units.
But the company has also been determined by concerns of how long it can keep its hot streak going, chiefly as the world starts to look past the pandemic.
Currently, analysts remain cautiously optimistic.
Nintendo “lacks an earnings growth story,” Atul Goyal, an equity analyst at Jefferies wrote. “We would have liked to see Nintendo start constructing a [broader] strategy, but that remains a dream.”