Nintendo, the renowned Japanese videogame company, experienced a significant surge in profit during the June quarter, driven by the success of their latest releases, The Legend of Zelda: Tears of the Kingdom and The Super Mario Bros. Movie. These highly anticipated titles revitalized both hardware and software sales, resulting in impressive financial performance.
Financial Highlights
Nintendo's operating profit for the fiscal first quarter reached an impressive 185.44 billion yen ($1.3 billion), marking an 82.4% increase compared to the previous year.
The company's profit per share also demonstrated substantial growth, with it reaching 155.48 yen ($1.09) - a substantial rise from 101.85 yen reported in the June quarter of 2022. This exceeded the expectations of analysts surveyed by FactSet, who anticipated a profit per share of 134.11 yen.
Net sales experienced a strong year-over-year increase of 50%, reaching 461.34 billion yen, surpassing the consensus estimate of 450.64 million yen.
Nintendo's American depositary shares (ticker: NTDOY) displayed a positive response to the news, rising by 2.4% on Thursday to $11.18.
Success of Tears of the Kingdom and The Super Mario Bros. Movie
Tears of the Kingdom, which was launched in May, achieved impressive sales figures, with a total of 18.51 million copies sold as of June 30.
Furthermore, the release of The Super Mario Bros. Movie in April generated increased interest in Mario games, spurring additional sales in this popular franchise. According to Box Office Mojo, the movie has already grossed $1.35 billion worldwide, positioning it in the top 15 highest-grossing films of all time. Additionally, Mario Kart 8 Deluxe sold 1.67 million copies, contributing to a total of 55.46 million units sold.
Strong Performance in Hardware and Software Sales
Nintendo also experienced growth in hardware sales, with a year-over-year increase of 13.9%.
Software sales also contributed to the company's robust performance, witnessing a growth rate of 26.1%.
This outstanding financial report highlights Nintendo's continued success in the gaming industry, underscored by the remarkable sales figures of their latest releases and the sustained demand for their hardware and software offerings. With their iconic characters and captivating games, Nintendo's dominance in the market remains unwavering.
Nintendo Predicts Strong Sales Growth and Higher Stock Value
In a recent analysis, financial firm X recommended investing in Nintendo stocks, emphasizing the company's valuable intellectual property. They believe that the upcoming successor to the popular Nintendo Switch console will ignite stronger sales growth and subsequently boost the stock value.
The predictions made by X were reinforced by Jefferies analyst Atul Goyal, who confirmed that Nintendo's latest results exceeded expectations. The sales of the game "Legend of Zelda" surpassed Goyal's initial estimate of 15 million units sold by March 2024.
Goyal further highlights that these impressive sales figures were achieved even before the upcoming holiday season. This reinforces the widespread popularity of Nintendo's first-party intellectual property and sets the stage for an optimistic trend in software sales when new games are launched on new hardware.
Notably, Nintendo has already accomplished around 40% of its projected operating profit for the entire year. Goyal anticipates that after the current quarter's results are published, Nintendo will raise its expectations even higher.
Looking ahead, Goyal expects Nintendo to release a successor to the widely acclaimed Switch console within the next year or two. This anticipated release will bring enticing new games from iconic franchises such as Mario Kart, Animal Crossing, Pokémon, and more.
Goyal confidently states, "This is what we believe will drive the fresh earnings cycle."
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