Nintendo Q2 FY2019
As is the case for this time of the year to get a lot of earnings reports, and I always love diving into Nintendos reports. The broad strokes for their report is that things are still continuing to go very well with many successful first party titles launched this quarter as well as existing titles continuing to sell well. In terms of hardware, the Switch is still on a solid sales path, especially with the addition of the latest iteration as well as an improved original. Nintendos Digital sales still represent a small portion of the total software sold most like due to the fact that Nintendo has always had a collectors feel to it, but the proportion of total digital is up around 10 percent from this time last year with around 36% being digital.
Overall net sales and gross profit are the best they have been for the first six months of the fiscal in the past 5 years. This is great news for Nintendo, who traditionally do the bulk of their sales in Q3 with things like Black Friday, Christmas, and Boxing Day generating sales. It was a strong quarter for the Switch with a total of 6.93 million units sold bringing the total Switch units sold to 41.67 million units. The addition of the Switch Lite to the family helped spark interest and bring new consumers into the ecosystem with the Lite generating almost 2 million in sales during the reporting period. This might not sound like a lot but the Lite only had 10 days at the end of the reporting period, which sound impressive that it sold almost 2 million in a little over a week. This now makes their projection for the rest of the fiscal year, which is the end of March 2020, up to 18 million units.
If these projections are met, then that would mean the Nintendo Switch would overtake the SNES on the list of all time units sold for Nintendo, and it would also put it with striking distance of the NES. The Switch has been a strong seller for Nintendo. It has already overtaken the N64, Gamecube, and Wii U. This time next year you will probably be able to add a few more to the list, especially when you consider the potential software releases as well as the often rumored Switch Pro. It would be a very smart move for Nintendo to release a “pro” version of the Switch, that would boast new features that could help take some of the conversation away from the next generation of consoles from Microsoft and Sony.
Things for Nintendo also look great from a software perspective with software sales up year on year by about 40% with 58 million software units sold in the first six months of the year and are now projecting to sell another 65 million units by the end of March. This target seems very attainable with the holidays upon us and you need something to go with your brand new system. In terms of which actual first party titles, there are three new editions to the million plus sellers. Fire Emblem: Three Houses sold 2.29 million, Super Mario Maker 2 sold 3.93 million units, and Links Awakening sold 3.13 million units. Links Awakening sales figures come across impressive for the same reason as the Switch Lite did and that was because it only had ten days before the reporting period ended.
Their existing line up also continues to sell extremely well with titles like Mario Kart 8, Smash Ultimate, Breath of the Wild, Super Mario Party, and new Super Mario Bros U Deluxe all selling over a million copies each in the first six months of the fiscal year. Mario Kart 8 is now sitting at just over 19 million copies sold and will most likely pass 20 million very soon, which is very impressive due to the fact that its a port. I can’t imagine what will happen when a new Mario Kart is released. In terms of what to look forward to from Nintendo before the end of the fiscal year, there is Luigis Mansion 3, Pokemon, and Animal Crossing. Listed on the TBA is Bayonetta 3, Metroid Prime 4, and the sequel to Breath of the Wild. You have to assume that one of those titles or possibly another large title that hasn’t been announced yet will be next holidays anchor, which will be used to compete against the next gen systems and that is exciting to think about.