Nintendo Financial Results Explanatory Material: 3rd Quarter of Fiscal Year Ending March 2022

Nintendo experienced a period of transition during the first nine months of the fiscal year ending March 2022, characterized by a year-on-year decline in net sales and operating profit. This contraction stems largely from the normalization of demand following the unprecedented surge in sales of Animal Crossing: New Horizons during the previous fiscal cycle, compounded by persistent global semiconductor shortages that constrained hardware manufacturing. Despite these headwinds, the Nintendo Switch platform achieved a significant milestone by surpassing 100 million cumulative units sold. Consequently, the company raised its full-year profit forecasts, bolstered by resilient software performance and favorable foreign exchange fluctuations.

Software performance served as a primary growth engine, particularly during the critical October through December quarter. First-party titles achieved record-breaking sell-through rates, driven by the successful launch of Pokémon Brilliant Diamond and Pokémon Shining Pearl alongside the sustained popularity of evergreen titles. Digital revenue also demonstrated significant momentum, recording a 31.2% increase in the third quarter alone. This growth was fueled by robust demand for downloadable content, add-on expansions, and the steady expansion of the Nintendo Switch Online subscription service, which helped offset earlier stagnation in digital sales.

The outlook for the remainder of the fiscal year remains focused on maintaining this software momentum across global markets, including North America and Europe. A diverse pipeline of first-party releases, such as Pokémon Legends: Arceus and Kirby and the Forgotten Land, is complemented by a strong roster of third-party support from major publishers like Square Enix, Ubisoft, and Warner Bros. Games. By leveraging this broad software ecosystem, the company aims to sustain hardware engagement and maximize the lifetime value of the Nintendo Switch user base as it navigates ongoing supply chain complexities.