Nintendo announced on Tuesday that it will unveil the next-generation successor to its renowned Switch console within this fiscal year. This decision follows the company's projection of a significant profit decline due to anticipated reduced sales of its current console. The new Switch is slated to be introduced by the end of the fiscal year concluding in March 2025, as per a statement from Nintendo President Shuntaro Furukawa shared on X, as translated by Google. However, the company clarified that no specifics about the upcoming console will be disclosed at the forthcoming Nintendo Direct event in June.
These announcements were made subsequent to Nintendo's financial disclosure for the fiscal fourth quarter and the full year up to March 2024. Earlier this year, Nintendo revised its sales forecast for the flagship Switch console to 15.5 million units for the fiscal year ending in March. Surpassing these projections, the company successfully sold 15.7 million units of the Switch during the fiscal year. Nintendo anticipates selling 13.5 million Switch consoles in the fiscal year ending March 2025.
Analysts told CNBC earlier this year that they expected a Switch 2 to be launched in 2024, though Nintendo had been tight-lipped about the new console.
Nintendo Trying To Revive Switch But It Isn't Exactly Working
Nintendo has prolonged the lifespan of its current Switch console thanks to the success of last year's "Super Mario Bros. Movie" and the flagship Zelda game, which sparked renewed interest in the console and its associated games.
Titles like “The Legend of Zelda: Tears of the Kingdom” and “Super Mario Bros. Wonder” were among Nintendo’s top-selling games for the fiscal year, contributing significantly to its revenue. However, Nintendo's gaming lineup for the current year appears to be lacking in quantity.
With a new console on the horizon, Nintendo intends to leverage the popularity of its iconic characters to reinvigorate hardware sales.
The ageing of the Switch is becoming evident in Nintendo's financial projections. For the fiscal year ending in March 2025, Nintendo anticipates net sales of 1.35 trillion yen and net profit of 300 billion yen. These figures are notably lower than analysts' estimates, as reported by LSEG. Nintendo's forecast represents a 39 per cent year-on-year decrease in profit.
Nintendo's Profit In 4th Quarter
CNBC quoted LSEG estimates to showcase how Nintendo did in its fiscal fourth quarter.
Revenue: 277.1 billion Japanese yen ($1.8 billion) versus 280.6 billion yen expected.
Net profit: 82.6 billion yen versus 57.2 billion yen expected.
Fiscal fourth-quarter revenue fell nearly 10 per cent year-on-year while net profit dropped 4.5 per cent.
Nintendo's sales for the entire fiscal year ending in March 2024 reached 1.7 trillion yen, surpassing analyst predictions with a 4.4 per cent increase year-on-year. The net profit stood at 490.6 billion yen, exceeding market expectations and marking a 13.4 per cent rise compared to the previous year.