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Media & Entertainment

Nintendo hits record as world plays games during pandemic lockdown

Gaming giant posts 427% rise in operating profit as demand for 'Animal Crossing' surges

A screen showing characters from the Animal Crossing series video game is seen at a Nintendo store in Tokyo on June 10.   © AFP/Jiji

TOKYO -- Nintendo posted its highest ever operating profit for the April-to-June quarter, logging a 427% rise to 144 billion yen ($1.3 billion), the Japanese gaming giant said on Thursday, as lockdowns and other social restrictions brought on by the coronavirus led to a surge in demand for its popular Switch console and game titles.

Net profit for the period reached its highest level since 2008, jumping 541% to 106 billion yen, while revenue doubled to 358 billion yen.

The Kyoto-based company attributed its bumper performance to strong demand for the Switch console as well as higher software sales, including those of smash hit "Animal Crossing: New Horizons."

The huge success of Nintendo's Switch is raising the stakes for rivals Sony and Microsoft, both of which are planning to roll out their newest consoles this winter.

The Switch sold 3 million units during the first quarter, up 43% compared to the year-earlier period. The handheld-only Switch Lite sold over 2.6 million units. 

The Switch, released in 2017, is already in its fourth year, well into the expected five-year life cycle of a game console, after which sales come off their plateau. However, a global stay-at-home trend amid the pandemic has increased the number of captive gamers.

Animal Crossing sold over 10 million copies during the quarter, bringing the total number sold globally since its release in late March to 22 million. Other popular titles, including, "Xenoblade Definitive Edition," also sold over 1 million copies. Total software sales doubled to over 50 million copies compared to a year ago.

Digital software sales also proved strong, tripling to 101 billion yen.

Nintendo hasn't been the only beneficiary of pandemic-triggered trends.

Earlier this week, Sony reported a 68% rise in operating profit for its gaming business to 124 billion yen for the April-to-June quarter. Revenue increased 32% to 606 billion yen.

The company's subscription-based gaming platform, PlayStation Plus, which allows users to access online multiplayer games for a monthly fee, experienced an 8% rise in subscriber numbers, to over 45 million.

"The Last of Us Part II," released in June, sold over 4 million copies globally in its first three days, becoming one of the fastest-selling PlayStation 4 games. Other titles also sold well.

Nintendo, despite its strong first-quarter results, kept its forecast for the current fiscal year unchanged. It expects net profit to decline 23% to 200 billion yen and operating profit to fall 15% to 300 billion yen. It forecasts revenue falling 8% to 1.2 trillion yen.

The outlook is based on Switch unit sales slipping 10% to 19 million units and on the strengthening yen.

Analysts say the forecast is conservative and that the company could make an upward revision in the latter half of the year.

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