Markets

Nintendo Blows Away Earnings Estimates on Switch, 'Animal Crossing' Sales

Nintendo (OTC: NTDOY) annihilated analyst earnings forecasts after posting fiscal first-quarter profits today that went stratospheric on the popularity of the Switch hybrid gaming console and the Animal Crossing: New Horizons game, which is only available on the Switch platform.

The video game giant reported profits surged 428% in the quarter, hitting 144.7 billion yen, or about $1.37 billion, more than double the 71 billion yen analysts had expected.

A couple plays video games.

Image source: Getty Images.

Game on!

The coronavirus pandemic forced people to stay at home and many, with nothing but time on their hands, took to playing video games. While most gaming platforms saw gains, there was nothing like the demand for the Switch, which quickly sold out early on in the crisis, leading Nintendo to apologize for the shortages and promise to get more on the market, but not before consumers jumped all over the Switch Lite, which also became scarce.

The primary difference between the two consoles is the full-strength version is able to be hooked up to a television. Nintendo reported it sold over 3 million Switch units and 2.6 million Switch Lite units, an increase of 167% for the Switch family.

Demand for both devices was driven by outsized popularity of the Animal Crossing game, which sold 10.6 million copies in the quarter, bringing the total units sold to 22.4 million. It made sales of other titles that would normally be considered big successes, like Mario Kart 8 Deluxe, which sold nearly 2 million units in the quarter, pale in comparison.

Nintendo said of all the Switch units that were played for the first time in the quarter, more than half played Animal Crossing on the first day.

The one drawback is the blowout quarter sets a very high hurdle to get over next year.

10 stocks we like better than Nintendo
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Nintendo wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of June 2, 2020

 

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool recommends Nintendo. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

NTDOY

Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More