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TOKYO (Reuters) – Japan’s Nintendo Co Ltd on Monday hiked its full-year forecast for Switch games console sales to 26.5 million from 24 million previously after a bumper end to 2020, buoyed by a home entertainment boom amid the COVID-19 pandemic.
The Kyoto-based firm said it sold 24.1 million hardware units in the first nine months of the financial year through March 2021 – more than its previous full-year forecast – comprising 16.8 million hybrid home-portable Switch consoles and 7.3 million portable-only Switch Lite devices.
Investors are weighing how far Nintendo can retain its momentum this year after its pipeline was padded in final months of 2020 with remastered titles from franchises like Super Mario and Pikmin.
Nintendo President Shuntaro Furukawa pointed to upcoming titles like ‘Super Mario 3D World’ and ‘Monster Hunter Rise’ as boosters for Switch sales, and said there was no plan to launch new hardware in the near term.
Those titles “are not only blockbusters but also Switch-exclusive system sellers”, said Serkan Toto, founder of game industry consultancy Kantan Games.
“In the video gaming business, Nintendo is the clear corona winner,” Toto added, referring to business during the global coronavirus outbreaks.
Both Sony Corp and Microsoft Corp have launched next-generation devices, but are struggling to meet overwhelming demand amid supply chain disruption due to the pandemic.
Nintendo’s conservative guidance is an ongoing bugbear for analysts and investors. Operating profit in the nine months ended December was 521 billion yen ($4.98 billion), doubling from 263 billion yen a year earlier.
Full-year profit forecast was hiked 24% to 560 billion yen – implying Nintendo sees only 39 billion yen of operating profit in the fourth quarter.
Software sales passed 176 million units in the nine months to the end of December, with lifetime sales for island life simulator ‘Animal Crossing: New Horizons’ passing 31 million.
Nintendo shares closed up 3.4% at 62,640 yen, ahead of the earnings release, after reaching a 13-year high of 67,600 yen in mid-December.
“With each passing quarter and with every increase in stock price, the downside from cyclical peak is also increasing,” Jefferies analyst Atul Goyal, who has a price target of 72,800 yen, wrote in a note ahead of earnings.
Reporting by Sam Nussey; Editing by Ana Nicolaci da Costa and Kenneth Maxwell