Nintendo’s second quarter results for fiscal year 2021 have been released. Much of the data is reported as a combined six month period, so that’s how we’ll refer to the data as well. That means most of the numbers will refer to the selling period from April 1, 2020 through September 30, 2020. For the first half of the fiscal year Nintendo’s net sales came in at 769.5 billion yen, up 73.3% year-over-year. Operating profit was 291.4 billion yen (+208.3%) and net profit came in at 213.1 billion yen (+243.6%). Nintendo’s video game division brought in 741.9 billion yen (+75.4%), mobile generated 26.7 billion yen (+33.9%), and playing cards .8 billion yen (-15.3%).
With two quarters under their belt, both of which were highly successful, Nintendo has revised its full-year forecast. It expects higher sales and profit thanks to increased demand of its products. Originally targeting 19 million Switch systems sold through the end of FY 2021 (March 31, 2021), Nintendo now expects to sell 24 million. Software has been beefed up from the original 140 million estimate to 170 million.
For the first half of its fiscal year Nintendo has seen significant growth in both hardware and software when compared to the prior year. Nintendo managed to sell 12.53 million Switch systems, up 80.9% when compared to the same time period last year. Software was way up as well, with 100.25 million sold (up 71.4%). Leading the charge was Animal Crossing: New Horizons with 14.27 million sold in the first half of the year. Super Mario 3D All-Stars sold a staggering 5.21 million units during its first 2 weeks on the market.
Digital sales continue to make up a decent chunk of software sales. It’s up year-over-year when compared to Q2 of last year. When looking at the trend of digital sales on the Switch we can’t help but notice a downward line on the chart. This is most likely because Animal Crossing: New Horizons was such a big digital game hit and one that many people like to have on their systems at all times. Now that sales have slowed down a bit the digital wave that the game initially provided has leveled off. Still, the eShop is bringing in some serious bank.
As of September 30, 2020 the Nintendo Switch has an install base of 68.3 million systems with 456.49 pieces of software sold. It has officially now outsold the NES, Super NES, N64, GameCube, and Wii U. The 3DS is next on its hit list!
Mario Kart 8 Deluxe has managed to hold onto its first place position for the most copies sold on the Switch. Animal Crossing: New Horizons is rapidly catching up, so we’ll have to see if it can manage to overtake it later this year. It’s fantastic to see The Legend of Zelda: Breath of the Wild knocking on the 20 million sold mark as it’s truly one of the best games ever made.
1. Consolidated Operating Results
During the six months ended September 30, 2020, for Nintendo Switch, Paper Mario: The Origami King, released in July, selling 2.82 million units and Super Mario 3D All-Stars, released in September as part of the Super Mario Bros. 35th Anniversary campaign, is off to a good start, recording sales of 5.21 million units. Titles released in previous fiscal years have also continued to sell well, with no loss of momentum. Of particular note within this group is Animal Crossing: New Horizons, with sales growing to 14.27 million units (for cumulative sales of 26.04 million units), contributing significantly to the overall growth in software sales and driving hardware sales. Sales of titles from other software publishers also continued to grow steadily. There is a total of 20 million- seller titles (including titles from other software publishers) this fiscal year. As a result of these factors, hardware and software sales both rose on a year-on-year basis, with hardware sales reaching 12.53 million units (80.9% increase on a year-on-year basis), and software sales reaching 100.25 million units (71.4% increase on a year-on-year basis).
Turning to our digital business for dedicated video game platforms, the growth in sales of downloadable versions of packaged software for Nintendo Switch, as well as the steady sales of download-only software, add-on content, and Nintendo Switch Online, helped to bring overall digital sales to 171.5 billion yen (139.4% increase on a year-on-year basis).
For the mobile business, many consumers continue to enjoy applications that were released in previous fiscal years, and our mobile, IP related income reached 26.7 billion yen (33.9% increase on a year-on-year basis).
As a result of these factors, total sales reached 769.5 billion yen, with overseas sales of 596.4 billion yen accounting for 77.5% of the total. Operating profit came to 291.4 billion yen, ordinary profit was 297.4 billion yen, and net profit attributable to owners of parent totaled 213.1 billion yen.
2. Consolidated Financial Forecast
For Nintendo Switch, we have Pikmin 3 Deluxe and Mario Kart Live: Home Circuit slated for October, with Super Mario 3D World + Bowser’s Fury scheduled for release in February as part of the Super Mario Bros. 35th Anniversary campaign. In addition to the second round of add-on content available with Pokémon Sword Expansion Pass and Pokémon Shield Expansion Pass, The Crown Tundra, coming in October, there is also a robust variety of appealing titles from other software publishers scheduled to be released. We will work to keep the platform active with new titles and by reinforcing sales of popular titles that have already been released.
In our mobile business, we will focus on operations that encourage more consumers to continue to enjoy playing the applications that have been previously released.
Also, as part of our Super Mario Bros. 35th Anniversary celebrations, the handheld game series Game & Watch (originally launched in 1980) is being brought back as part of a collaboration with Super Mario Bros., in the November launch of Game & Watch: Super Mario Bros. We have various campaigns and collaborations related to Super Mario planned.
We have revised the financial forecast originally published on May 7, 2020. For details, please see the Notice of Full-Year Financial Forecast and Dividend Forecast Modifications issued today (November 5, 2020).
Q2 FY21 Nintendo Supplementary
Q2 FY21 Nintendo Financial Results