Nintendo Financial Results Explanatory Material: 2nd Quarter of Fiscal Year Ending March 2023

The financial results for the second quarter of the fiscal year ending March 2023 demonstrate a period of resilient growth for Nintendo, characterized by strong software performance and significant currency-driven gains, despite ongoing supply chain constraints. The company reported net sales of 656.9 billion yen, a 5.2% increase year-on-year, and a net profit of 230.4 billion yen, representing a 34.1% rise. This profitability was bolstered significantly by non-operating income, specifically 76.4 billion yen in foreign exchange gains resulting from the depreciation of the yen.

The dedicated video game platform segment remains the primary driver of revenue, contributing 631.4 billion yen. While hardware unit sales declined by 19.2% to 6.68 million units due to persistent semiconductor shortages, the company successfully offset volume losses through favorable exchange rates and a robust digital sales strategy. Digital revenue grew by 30.2% to 187.8 billion yen, now accounting for 51.0% of total software sales. Software performance remained strong, with unit sales increasing by 1.6% to 95.41 million units, supported by the successful launches of titles such as Splatoon 3 and Nintendo Switch Sports, which contributed to a total of 15 million-seller titles during the period.

Looking ahead, the company has revised its full-year forecast, adjusting the Nintendo Switch hardware sales target downward by 2 million units to 19 million units while maintaining its software sales outlook. The revised guidance reflects a cautious approach to production recovery and updated foreign exchange assumptions. Despite the hardware volume reduction, the company maintains a positive outlook for the remainder of the fiscal year, focusing on sustaining sales momentum through the holiday season with key software releases and continued efforts to optimize production and distribution.