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Investors are watching gaming firms closely for signals that the
COVID-19 pandemic sales boom may be running out of steam.
Nintendo is highly dependent on the cyclical console business,
with sales of its devices traditionally peaking around the fifth
year.
Nintendo saw sales of Switch Lite units more than halve to 1.14
million during the April-June quarter but maintained its
full-year forecast for Switch hardware at 25.5 million units. It
sold 4.45 million Switch consoles, including the Lite, during
the quarter.
The creator of Super Mario and Animal Crossing said
first-quarter operating profit fell 17% to 119.8 billion yen
($1.1 billion), falling short of a Refinitiv consensus estimate
of 129.3 billion yen.
In contrast, Sony Corp said on Wednesday sales of its new
PlayStation 5 were robust, helping it post a record profit
during the quarter.
Both companies have warned that shortages of semiconductors
could hurt game console output beyond current targets.
Kyoto-based Nintendo is hoping to revive Switch sales momentum
with a new $349.99 Switch OLED model launching on Oct. 8. It is
also relying on a pipeline of popular games including "WarioWare:
Get It Together" and remakes of Pokemon titles to boost
earnings.
It stuck with its full-year profit forecast of 500 billion yen,
lower than an average prediction of 623.5 billion yen. The
company is known for releasing conservative profit outlooks that
it revises up through the business year.
In a shareholder pleasing move, Nintendo on Thursday also
announced a plan to buy back up to 1.51% of its shares worth up
100 billion yen.
($1 = 109.6200 yen)
(Reporting by Tim Kelly and Sam Nussey; editing by Anil D'Silva
and Edwina Gibbs)
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