Nintendo Financial Results: 1st Quarter of Fiscal Year Ending March 2022

Nintendo’s financial results for the first quarter of the fiscal year ending March 2022 reflect a period of year-on-year decline following the exceptional performance of the previous year. Net sales for the quarter reached 322.6 billion yen, a 9.9% decrease compared to the same period in the prior fiscal year. Operating profit fell by 17.3% to 119.7 billion yen, while net profit attributable to owners of the parent declined by 12.9% to 92.7 billion yen. These results are largely attributed to the high baseline established in the first quarter of the previous fiscal year, which was significantly bolstered by the massive commercial success of Animal Crossing: New Horizons.

The dedicated video game platform segment, which accounts for the vast majority of revenue, saw sales drop 10.3% to 308.9 billion yen. While Nintendo Switch hardware and software sales remained steady, the absence of a comparable blockbuster release led to a 10.2% decline in software unit sales to 45.29 million units. Digital sales also experienced a contraction, falling 24.9% to 75.9 billion yen, as the proportion of digital purchases normalized following the peak stay-at-home demand observed during the early stages of the COVID-19 pandemic. Despite these declines, the company maintained its full-year financial forecast, citing a robust pipeline of upcoming titles and the planned introduction of the Nintendo Switch OLED model.

Operating expenses rose by 9.4% to 73.1 billion yen, driven primarily by increased advertising expenditures associated with new software launches. Gross profit margins remained resilient at 59.8%, benefiting from favorable foreign exchange rates despite a shift in the sales mix. To optimize capital efficiency, the company announced a share buyback program of up to 100 billion yen, with plans to cancel all repurchased shares. This strategy underscores a commitment to maintaining a strong financial base while balancing sustainable growth investments with shareholder returns.