Nintendo will announce its financial results for the second quarter of the fiscal year ending March 2022 on November 4. In addition, Nintendo is reported to have set the output of Switch game consoles for the full fiscal year at 24 million units. It has not reached the originally planned output.
In the last fiscal quarter, Nintendo’s net profit was 92.75 billion yen (approximately $0.81 billion), and the market was estimated to be 82.56 billion yen ($0.72 billion); sales were 322.647 billion yen ($2.83 billion), a year-on-year decrease of 9.9%; operating profit was 119.752 billion yen ($1.05 billion), a year-on-year decrease of 17.3%.
Nintendo predicted that the annual operating profit was 500 billion yen, and the market was estimated to be 624.16 billion yen; the annual net sales were predicted to be 1.6 trillion yen, and the market was estimated to be 1.77 trillion yen. Net profit was 340 billion yen, and the market was estimated to be 447.03 billion yen ($3.92 billion).
It is worth mentioning that in the first quarter, Nintendo forecasted annual Switch hardware sales of 25.5 million units. In the first quarter, Switch hardware sales were 4.45 million units, a year-on-year decrease of 22%.
In the fourth quarter of the previous fiscal year, Nintendo sold 4.73 million Switch hardware, which was also down from the previous quarter. The total sales of Switch hardware have reached 89.04 million units, and the sales of software have reached 324 million units.
Nintendo Switch OLED Costs More
When looking at the market of game consoles, the prices may be confusing. In this sense, an article we wrote back in July could be quite useful. At that time, we were talking about the new Nintendo Switch OLED models that hit the market earlier. The new model sports a 7-inch OLED screen and brings a series of improvements. For this, the company charges $350. In other words, it’s $50 more expensive than the original variant.
This caused a lot of stir on the market. The company has been always slashing prices in order to boost sales rather than raising them. We have been expecting the firm to act in this way in the period of pandemics and lockdown. We mean because of COVID-19 people have had to find ways of entertaining themselves. It drove to record profits, downloads, and subscribers’ numbers for Sony and Nintendo.
So Nintendo’s decision to increase the price from $300 to $350 seems illogical. Of course, the new Nintendo Switch comes with an OLED panel and provides better performance than the original model. But is $50 the right amount to increase the price?