Nintendo relies on Zelda to support its profits while waiting for a new Switch

More than six years after its launch in early 2017, Nintendo’s Switch console has still sold 18 million copies over one year. Although these volumes, unveiled on Tuesday during the presentation of Nintendo’s financial results, are slightly lower than the Japanese giant’s initial projections and represent a 22% drop compared to the previous year, they nevertheless testify to the strong resistance of the star product of the group.

Over the fiscal year from April 2022 to March 2023, the Switch has even established itself as Nintendo’s best-selling console at this time of the end of the cycle. Even the DS, the most popular platform in the Kyoto company’s history, was in less demand in its sixth year of existence.

Towards 140 million Switch

Refusing to mention, for the moment, the launch of a Switch 2, Nintendo hopes that the launch of new games in the coming months will help maintain demand for its somewhat “aging” model, now available in cheaper “lite” or in a premium version with an OLED screen. Over the financial year which will end in March 2024, the group hopes to sell another 15 million Switches, which would push the total sales of this model to 140 million units. The DS had reached 154 million.

Fans of Nintendo, which has built its growth on the development of playable franchises exclusively on its platforms, are particularly awaiting the global launch this Friday of “Zelda: Tears of the Kingdom”, which follows “Zelda: Breath of the wild”. . This game has sold nearly 30 million copies worldwide since its release in early 2017. Orders for the new Zelda “are progressing well”, said Nintendo President Shuntaro Furukawa on Tuesday after the presentation of its financial results.

11 billion euros turnover

Over the year as a whole, the group saw its turnover fall by 5% to 1,600 billion yen (10.8 billion euros), despite a very favorable exchange rate which boosts the results of multinationals Japanese. Since the yen has fallen sharply against other major currencies, sales made abroad and converted into yen are mathematically boosted in the results.

Nintendo’s operating profits fell by 15% to 504 billion yen (3.4 billion euros) but still represent a profitability of 31.5%, very high in the video game industry, particularly for a group of only 7,300 employees.

Over the current year, the company believes that the launches of new games and the acceleration of its diversification strategy in entertainment – like the Super Mario movie – will enable it to contain the fall in its profits to only 11%, year-on-year, to reach 450 billion yen over the financial year. Then it will be time to orchestrate the launch of a new console and a new cycle of growth.