Nintendo Records 5% Drop in First Quarter Sales as Recovery Begins; Reiterates FY23 outlook

  • Nintendo Co.,Ltd NTDOY announced a decline in net sales in the first quarter of FY23 of 4.7% year-on-year to 307.4 billion yen.
  • Sales of dedicated video game platforms fell 4.3% year-on-year to 295.6 billion yen. IP-related mobile revenue sales fell 16.8% year-on-year to 10.9 billion yen. Sales of playing cards rose 56.9% year-on-year to 0.8 billion yen.
  • Material: Unit sales for the entire Nintendo Switch family of consoles fell 22.9% year-on-year to 3.43 million units. Nintendo Switch sales fell 60% year-on-year to 1.32 million units. Nintendo Switch Lite sales fell 48.4% year-on-year to 0.59 million units.
  • Software: Software sales fell 8.6% year-on-year to 41.41 million units. Digital sales increased 16% year-on-year to 88 billion yen.
  • Profit: Gross profit fell 4.3% year-on-year to 184.5 billion yen due to lower net sales. The gross margin remained stable at 60%.
  • Operating profit fell 15.1% year-on-year to 101.6 billion yen due to lower gross profit and higher general and administrative expenses. The operating margin contracted by 400 basis points to 33.1%.
  • Net profit increased 28.3% year-on-year to 118.9 billion yen, and net margin increased 1,000 basis points to 38.7%.
  • Outlook for FY23: Nintendo reiterated its net sales forecast of 1.6 trillion yen, down 5.6% year-on-year.
  • It sees Nintendo Switch hardware at 21 million units, implying an 8.9% year-over-year decline. He considers a Nintendo Switch software of 210 million units, which means a decline of 10.7% year-on-year.
  • The operating profit outlook remained at 500 billion yen, implying a decline of 15.6% year-on-year and net profit of 340 billion yen, a decline of 28.8% year-on-year.
  • He held 1.12 trillion yen in cash and cash equivalents.
  • Price action: NTDOY closed down 2.36% at $54.53 on Tuesday.
  • Photo via company

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