Nintendo increases profit expectations as sales remain strong

Nintendo has announced that it is increased its earnings forecast for its fiscal year ending in March. The latest increase marks the second time in the last three months that Nintendo has increased its earnings forecast. With the latest increase, Nintendo now expects a record net profit of ¥400 billion, about $3.8 billion.

The latest increase in its earnings forecast comes thanks to the Switch game console's strong sales and robust sales of popular software like Animal Crossing: New Horizons. Nintendo's latest estimate is that its net profit for the full year will increase 55 percent compared to the previous year.

The last increase in its profit forecast came in November when Nintendo announced it expected net profit to surpass ¥300 billion, which would beat a record set in 2009. Demand for the Nintendo Switch game console has increased significantly during the coronavirus outbreak when people have been stuck at home with little to do. Nintendo also saw brisk sales during the holiday shopping season at the end of 2020.

Record profit during the year is underpinned by a 22 percent growth in revenue to ¥1.6 trillion. Nintendo also said it expects operating profit to increase by 59 percent compared to last year to ¥560 billion. Monday Nintendo also posted its best-ever net profit for the April to December quarter. Net profit for that period rose 92 percent to ¥376 billion compared to 2019.

Its previous record for the nine months through December was back in 2007 at ¥258 billion. While the coronavirus pandemic has negatively impacted millions of businesses worldwide, gaming companies and streaming companies have flourished as more people at home looking for things to do to pass the time.