Nintendo profits leap by 7 per cent

Nintendo stocks rose by 7 per cent yesterday, showing the group’s operating profits soared to Y67bn ( $614m) in July-September 2019 and smashed consensus estimates as the group’s bet on a cheaper version of its Switch console appeared to have paid off.

Most analyst were forecasting about Y50m and several were surprised that Nintendo opted to leave untouched its now conservative-looking Y260bn forecast for the full year to end March 2020.

The profits leap was partly attributed to sales of almost 2 million units of the Switch Lite, a slimmed-down model for handheld use launched in September which has drawn in what the company said was a high proportion of first-time console buyers, many of them women, also strong sale of Nindendo’s in-house pantheon of Mario, Zelda and Pokémon, and since these games are produced in-house, margins for Nintendo are higher.

In September, Nintendo launched a mobile version of its flagship Mario Kart series,  which was free to download but deploys a variety of industry proven methods, including the controversial “loot boxes” that emanate random prize, to monetise continued play, perfectly suited to smartphone gaming. But the game was not ready at launch to run in multiplayer mode which to most gamers critical element in the Mario Kart series.