“Nintendo’s Profits Decline as Global Chip Shortage Takes Its Toll”
TOKYO (AP) – Japanese video game maker Nintendo saw profits fall slightly from April to December as it maintained strong sales of its Switch console games.
Nintendo Co.’s net income for the nine-month fiscal year ended March was 346 billion yen ($2.6 billion), down 5.8% from 367 billion yen for the same period last year.
Nintendo, the Kyoto-based maker of Pokemon and Super Mario video games, didn’t provide a breakdown of its quarterly earnings.
Well-selling games included Splatoon 3, a paint shooter game, Pokemon Scarlet and Violet, and Nintendo Switch Sports.
Nintendo sold fewer machines year-over-year, partly due to a shortage of computer chips, a critical part for the console, due to pandemic production disruptions, the company said.
Nintendo lowered its full-year profit guidance to 370 billion yen ($2.8 billion), from the 400 billion yen ($3 billion) it had forecast in November. Profit for the previous fiscal year was 477.7 billion yen.
Nine-month sales for this fiscal year were nearly 1.3 trillion yen ($10 billion), down 1.9% year-on-year.
Nintendo used to be more optimistic about its performance because an increase in people staying at home during the pandemic boosted its sales.
That advantage is likely waning now that pandemic restrictions have eased and people are increasingly traveling and working outside of their homes, both in Japan and around the world.
Nintendo expects to sell 18 million Switch consoles in the current fiscal year, down from a previous forecast of 21 million Switch devices, which was reduced to 19 million devices late last year.
Cumulative Switch sales around the world have exceeded 122 million devices.
Japanese exporters like Nintendo have received a profit boost from the yen’s weakness against the US dollar and other major currencies. This increases the value of their overseas earnings when converted to yen.
The US dollar is now trading at around 130 yen after rising to around 150 Japanese yen a few months ago.
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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
Yuri Kageyama, The Associated Press
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