Nintendo (TYO: 7974) reported slowing profits, but increasing hardware sales, in its earnings release for the quarter ending June 30.

The company’s net revenue climbed from ¥168 billion ($1.54 billion USD) in June 2018 to ¥172 billion ($1.58 billion USD) in June 2019, a growth of 2.4%. However, operating profit decreased 10.2% during the same period, declining from ¥30.5 billion ($281 million USD) to ¥27.4 billion ($252 million USD). Nintendo attributed the decline primarily to “foreign exchange losses” equal to about ¥12 billion ($110 million USD).

Hardware and software sales steadily climbing

Sales of Nintendo hardware and software continued to climb in the reported quarter. The Nintendo Switch sold 2.13 million units during the period, a 13.2% increase year-on-year. Software sales totaled 22.62 million units, a 25.9% increase year-on-year.

The company’s best-selling game for the period was Super Mario Maker 2, which was released in June and has sold 2.42 million units. Super Mario Kart 8 Deluxe, which was released in April 2017, sold 1.2 million units, becoming the system’s highest-selling game with total sales equal to 17.89 million units. December’s Super Smash Bros. Ultimate has sold 15 million units, while Switch launch title The Legend of Zelda: Breath of the Wild has sold 13.6 million units.

Nintendo continues to report on sales of Nintendo 3DS hardware and software despite the handheld console’s decreasing relevance. For the period ending June 30, the system sold just 0.2 million units, down 44.9% year-on-year. Digital and physical software sales for the system totaled 1.48 million units, a similarly dire 49.7% decrease year-on-year.

Income from the company’s mobile division was a comparably modest ¥10 billion ($92 million USD), representing an increase of 10% year-on-year.

Switch lineup cornerstone of future profits

Nintendo is hinging its future performance primarily on a number of Switch-exclusive titles being released on a monthly schedule in the near future. Fire Emblem: Three Houses was released July 26. PlatinumGames’ Astral Chain is scheduled for August, the remake of The Legend of Zelda: Link’s Awakening for September, Luigi’s Mansion 3 for October, and Pokémon Sword and Pokémon Shield for November.

The company will also release an updated version of the Switch with increased battery life in August, and a less expensive, handheld-only variant on the Switch called the Switch Lite on September 20. The company expects these new models will enable the continued increase of its profits from hardware sales.

Patrick Lee
Patrick Lee is a contributing editor at Escapist Magazine and managing news editor at Gaming Street.

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