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Nintendo Financials (November, 2023): results and highlights, Investors Briefing, Q&A

Lite_Agent

Nintendo Financials – Results

Nintendo have shared their latest financial results, covering the period ended September 30th, 2023 (April 1st 2023 to September 30th 2023). You will find all the details on these pages:

  • Consolidated Financial Highlights, with consolidated operating results, the forecast for the current Fiscal Year, Nintendo comments, sales information (regional breakdown, digital sales), sales data and forecast, and more
  • Financial Results Explanatory Material, with lots of additional sales data, list of million-sellers this Fiscal Year, release planning, and more

Some highlights:

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  • The Legend of Zelda: Tears of the Kingdom shipped 19.50 million units worldwide. That’s only 1 million more than the 18.51 million units shipped as of June 30th, but that’s because Nintendo did ship a lot of units during the launch quarter (about 2.8 million units more than what was effectively sold). While popular digitally, Nintendo not that the game enjoyed “robust” sales at retail;
  • Pikmin 4 is off to a great start with 2.4 million units shipped worlwide;
  • Mario Kart 8 Deluxe just won’t stop, and 3.22 million units were shipped during the past two quarters (bringing total shipments to 57.01 million units);
  • A total of 16 games sold over 1 million units during the first half of the current Fiscal Year;
  • Nintendo Switch sales: 6.84 million units for Hardware (+2.4% Year on Year) and 97.08 million units for Software (+1.8%).
  • Digital sales: 217.5 billion Yen / $1.45 billion (+15.8% Year on Year), thanks to strong sales of the digital version of retail games, DLC, and increasing Nintendo Switch Online sales (the depreciation of the Yen also contributed). However, the proportion of digital sales went down compared to the same period last year;
  • Mobile and IP-related business: 55 billion Yen (+133.3% Year on Year, mostly thanks to the Super Mario Bros. Movie)
  • Sales outside Japan account for 623.6 billion Yen, which is 78.3% of total sales (796.2 billion Yen)
  • Nintendo is planning to “invigorate” the Nintendo Switch with a steady stream of releases (including DLC)
  • The forecast for the current Fiscal Year has been revised (see screencap above for more details)

Also, the following pages have also been updated:

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Top Selling Title Sales Units: Top 10 Software for each platforms:

Nintendo Financials – Briefing

You can find the full transcript of the Second Quarter Financial Results and Corporate Management Policy Briefing on this page!

Here’s some highlights:

  • net sales during the first half of the current Fiscal Years were the highest ever recorded for the first half of any Fiscal Year. This was due to strong sales of games, but also the success of the Super Mario Bros. Movie and the Yen depreciation;
  • 169.84 million people have seen the Super Mario Bros. Movie in theatres;
  • the Super Mario Bros. Movie led to a x1.3 increase in sales of Mario games on Nintendo Switch, and x1.4 in revenue for smart device games (Year on Year), with also merchandise sales seeing a noticeable boost;
  • Super Mario Bros. Wonder sold 4.3 million units worldwide during the first two weeks, making it the biggest release for a Mario game since Wii and Nintendo DS era (Nintendo did not collect sell-through data before then);
  • the Pikmin short movies have been viewed over 440 million times worldwide;
  • Nintendo games on smart devices have been downloaded over 860 million times as of September 30th 2023;
  • Nintendo is planning to host Nintendo Live events in Taipei, Seoul, and Hong Kong;
  • the number of Nintendo Accounts is over 330 millions worldwide;
  • during the first half of the current Fiscal Year, sales of 1st party games reached their second highest level since the launch of the Nintendo Switch;
  • the Nintendo Switch has allowed Nintendo to increase their sales in “Other” regions (beyond Europe, Japan, or North America);
  • the number of Nintendo Switch Online subscribers is over 38 millions as of September 30th 2023;
  • the number of annual playing users has reached 117 millions;
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Nintendo Financials – Q&A

The transcript of the Q&A session is now available in English: click here to check it out! Here’s the list of questions:

Question 1: Although Nintendo is not financing its theme park initiatives, it does directly invest in visual content like The Super Mario Bros. Movie and the just-announced plan to develop a live-action film of The Legend of Zelda. With that in mind, I would like to hear your thoughts on the risks and opportunities associated with expanding Nintendo IP beyond dedicated video game platforms, as well as your thoughts on investing the company’s capital. Going forward, do you intend to accelerate your initiatives utilizing IP outside of dedicated video game platforms? Also, how do you strike the right balance between efforts to maximize the value of Nintendo IP and the risk of devaluing that IP?

Question 2: Following the release of The Super Mario Bros. Movie, was there anything unexpected in the reactions in different markets or the ripple effects on business? Also, I would like to ask again about your mid- to long-term strategy for the visual content business as a whole. Are you thinking of further expanding the selection of Nintendo visual content and providing it all in one place in the future? Or do you think that the main role of visual content is to support the dedicated video game platform business?

Question 3: Hardware and software sales in the first half were both great, considering the platform is in its seventh year. Can you give us some reasoning as to why the Nintendo Switch Platform continues to perform well? I figure that The Super Mario Bros. Movie had a positive impact on the dedicated video game platform business, but as a company, how do you evaluate that? Also, were hardware sales driven in any way by the release of models with special designs like Nintendo Switch – OLED Model – The Legend of Zelda: Tears of the Kingdom Edition? When you develop models with special designs like that, what points do you keep in mind? Lastly, Nintendo Switch sales from January to March of this year were not particularly strong, but sales began growing again in April. What do you make of that?

Question 4: Thanks in part to the success of The Super Mario Bros. Movie, your mobile and IP related income is increasing. Can you tell us about the extent to which you want to grow revenue in this area in the future? I expect dedicated video game platforms will continue to be the core of your business, but is IP utilization in things like visual content going to become an additional pillar of revenue? Currently, your mobile and IP related business accounts for less than 10% of total sales. Have you considered setting a target percentage of total sales and expanding the business?

Question 5: Regarding the utilization of cash on hand, there was mention in the presentation that the amount was expected to exceed what was initially indicated, primarily in the area of “games” under “building software assets”. Is this because the development of both games and other content, like movies, is accelerating? I’d like to hear more about why you expect the scale of investment to increase.

Question 6: I have a question about your approach to game development. You say that integrated hardware-software development is Nintendo’s core business. Prior to Nintendo Switch, it seemed like the characteristics of your hardware were often the driving force in delivering new and innovative gameplay. But now it seems to me that it’s software that’s driving the new kinds of gaming for Nintendo Switch. For example, I feel like while both The Legend of Zelda: Tears of the Kingdom and its predecessor, The Legend of Zelda: Breath of the Wild, were released on Nintendo Switch, they play very differently. Has there been some kind of change in the relationship between hardware and software, or in your approach to software development? If so, I’d like to hear about it.

Lite_Agent

Founder and main writer for Perfectly Nintendo. Tried really hard to find something funny and witty to put here, but had to admit defeat.