FinancialNacon
24.5% Sales Increase in Q1 Despite a Strong Comparison Basis
27 Jul 20202 pages~4 min full read
Nacon reported a 24.5% year-over-year sales increase for Q1 2020/21, reaching €38.0 million despite a challenging comparison basis.
The accessories division grew 134.9% to €22.5 million, fueled by the acquisition of the RIG headset brand and expansion into the U.S. market.
Digital distribution accounted for 80.7% of total game turnover, with back-catalogue sales surging 340% to €10.8 million.
New game revenue declined 27.4% to €14.5 million during the quarter due to a lower volume of major releases.
The company reaffirmed its full-year 2020/21 financial guidance, projecting sales between €140 million and €150 million with an 18% operating income margin.
Long-term strategic targets for fiscal year 2022/23 remain set at €180 million to €200 million in sales, supported by a global workforce of 510 employees.
Nacon achieved a significant 24.5% increase in sales during the first quarter of the 2020/21 fiscal year, reaching €38.0 million compared to €30.5 million in the previous year. This growth was primarily driven by a surge in the accessories segment and the acceleration of digital game sales, effectively offsetting a decline in new game revenue caused by a high comparison basis from the prior year. The reporting period covers April 1 to June 30, 2020, a timeframe characterized by global lockdown measures that influenced consumer behavior toward digital entertainment.
The accessories division emerged as a primary growth engine, with sales rising 134.9% to €22.5 million. This performance was bolstered by the acquisition of the RIG premium headset brand and the establishment of a United States subsidiary, allowing the company to capitalize on a thriving market for controllers and audio equipment. Conversely, game sales fell 27.4% to €14.5 million due to fewer major releases; however, back-catalogue sales surged by 340% to €10.8 million. Digital distribution became the dominant channel for software, accounting for 80.7% of total game turnover during the quarter.
Looking forward, the company maintains its financial targets for the full 2020/21 fiscal year, projecting sales between €140 million and €150 million with an 18% current operating income rate. Growth is expected to continue through the release of titles such as WRC 9 and Tennis World Tour 2, alongside a new partnership with Microsoft for next-generation console controllers. Long-term strategic goals for the 2022/23 fiscal year remain fixed at sales between €180 million and €200 million, supported by a global distribution network spanning 100 countries and a workforce of approximately 510 employees.
