Japanese video game maker Nintendo Co. Ltd. is expecting a 39% drop in net profit for the fiscal year that began in April. The company cited weaker sales of its popular Switch consoles and software as the primary reason for the decline in projected earnings.
Nintendo had originally forecasted a net profit of 200 billion yen ($1.83 billion) for the fiscal year, but has now revised its forecast down to 120 billion yen. This would mark the first decline in annual profit for the company in four years.
The Switch console has been a major success for Nintendo since its release in 2017, with sales surpassing 84 million units worldwide. However, the company has been facing challenges in maintaining momentum for the console as competition in the gaming industry continues to intensify.
In addition to weaker sales of the Switch console, Nintendo has also been impacted by delays in the release of new games due to disruptions caused by the COVID-19 pandemic. The company has had to push back the launch of several highly anticipated titles, which has had a negative impact on software sales.
Despite the projected drop in net profit, Nintendo remains optimistic about its long-term prospects. The company has a strong lineup of games planned for release in the coming year, including new entries in popular franchises such as “The Legend of Zelda” and “Metroid.” Nintendo is also looking to expand its reach in the mobile gaming market, with plans to release more smartphone games in the future.
Nintendo’s stock price has taken a hit following the revised profit forecast, but analysts believe that the company’s strong brand and loyal fan base will help it weather the current challenges. Investors will be closely watching Nintendo’s performance in the coming months to see if the company can bounce back from the projected drop in net profit.
