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All the news from Nintendo’s Financial Results Briefing – with charts!

by Oliver BrandtFebruary 1, 2019

Yesterday, Nintendo delivered its financial report for the 3rd quarter of their 2018/2019 fiscal year, where we learned that the Switch shipped a lot of units over the holiday period, and that Super Smash Bros Ultimate was an absolute powerhouse. But aside from the announcement that Mario Kart Tour had been delayed, there wasn’t a whole lot of news.

Today, Nintendo held its Corporate Management Policy and Financial Results Briefing, a presentation to investors that Nintendo makes the day after financial reports are released. It’s these briefings that give us a closer look at where Nintendo is as a company, and where they’re headed next.

So here’s an overview of Nintendo’s Q3 18/19 Financial Results Briefing — with charts!

On the Switch not meeting its hardware sales forecast… 

Nintendo revised its hefty sales forecast for the fiscal year in yesterday’s report — where it was previously 20 million units shipped, it’s now been reduced to a still-respectable 17 million units. Nintendo president Shuntaro Furukawa, who led today’s briefing, said that while Switch hardware had not been selling as well as expected, things were booming on the software side of things.

Hardware sales so far this fiscal year have not been at a pace needed to reach the full-year target that we set at the beginning of the fiscal year. But Nintendo Switch sales continue to grow at a rapid pace globally, and especially software sales are extremely robust. I believe this past holiday season laid a solid foundation for further expansion of the Nintendo Switch business.

Furukawa noted that Nintendo had a strong holiday period for software, with major titles such as Pokemon Let’s Go, Super Mario Party, and Super Smash Bros Ultimate contributing to the massive hardware and software sales numbers.

On hardware and software sell-through rates… 

Furukawa then turned to talking about sell-through rates of Nintendo products in Japan, North America, and Europe. The sell-through sales numbers are the amount of units sold to customers, as opposed to the units shipped to retailers. Here, Nintendo says, both hardware and software sell-through rates exceed the already-strong sell-through seen in the same period last year, with Europe in particular seeing a massive increase.

The total sell-through for the Switch hardware across all regions is also greatly exceeding the Wii U in the same time period (who’d have guessed?). It’s not quite at Wii levels, but it’s getting pretty close, though Furukawa stressed that, since the Wii and Wii U launched in holiday periods, the numbers aren’t directly comparable.

It was also revealed that, as of the end of January, the Switch sell-through for hardware is 30 million units, which is not bad at all.

On Super Smash Bros Ultimate… 

Super Smash Bros Ultimate has done insanely well, shipping a total of 12.08 million units in December alone. It was revealed today that the latest entry in the Smash Bros series has also achieved a sell-through of 10 million units in its first five weeks on sale, making it the fastest selling Nintendo home console game ever. It also has the highest sell-through of any game in the series in Japan, which is a pretty big achievement itself.

On third-party publishers…

Nintendo’s not the only company making money on the Switch. For the period of April to December 2018, software revenue for third-party titles increased more than twofold over the same period in the year prior.

On digital sales…

Nintendo hasn’t always been known for their online prowess, but the Switch has made it easier than ever to buy digital titles. Because of this, and because of the incredibly strong software sales for titles like Super Smash Bros Ultimate, digital revenue for the company has increased by a huge amount compared to recent years.

In addition to the pure growth in sales volumes for Nintendo Switch software and the associated growth in overall digital sales, there are more consumers choosing digital versions of packaged software, as well as growth in download-only titles, addon content, and subscription services, such as Nintendo Switch Online, from both Nintendo and other software publishers.

On Nintendo’s market strategy… 

For a long time, Nintendo’s strategy has been to expand the gaming audience, by providing products that appeal to both existing gamers and people who’ve never played games before. However, with the rise of mobile gaming, gaming became a much more common hobby, to the point where expanding the audience is no longer a viable strategy.

Because of this, Nintendo has outlined their new market strategy: expanding the number of people who have access to Nintendo IP.

In addition to our development capabilities in creating integrated hardware-software products, we pursued discovery of new business opportunities by focusing on the game characters and worlds we have built up over the history of Nintendo’s home entertainment systems, considering this IP as our starting point, and by expanding this IP.

Nintendo have outlined three points in order to pursue this goal, and three pillars upon which to build the strategy.

On the Nintendo Switch Online Service…

We’ve been wondering how well NSO has performed for a little while now, and we finally have numbers. According to Nintendo, there are 8 million subscribers, including accounts with family memberships. Nintendo describes this as “a good start,” which it is, given how barebones the service continues to be. Curiously, there is mention that they have plans to expand the service to provide more value. We don’t know exactly what that means yet, but it’ll be interesting to see how Nintendo plans on making the service worth it for those who haven’t taken the plunge yet.

In last September, we launched Nintendo Switch Online, a paid service that expands the online functionality of Nintendo Switch. Nintendo Switch Online has had a good start, with the number of subscribers surpassing 8 million accounts not including free trials. In keeping with our goal of providing Nintendo Switch owners with “More Games. More Features. More Fun,” we are working on continuing to expand the service offerings.

On their mobile games… 

Finally, at long last, Dragalia Lost is expanding to be released in Australia (as well as Canada, the UK, and we assume New Zealand). We don’t know when it’ll happen, but it’s a long time coming — the game, which is a collaboration with Cygames, first launched in September 2018 in a select group of regions.

Mario Kart Tour, as we reported yesterday, has been pushed into the 2019/2020 fiscal year, to “enhance the quality and expand the service contents, such as in-game events.” It’s targeting US Summer 2019.

On the flip side, Nintendo also announced a new free-to-start mobile title, in collaboration with LINE, Dr. Mario World. It’s aiming for an early US Summer (Winter for us south of the equator) release, and will be available in over 60 countries across the world at launch.

On expanding Nintendo’s IP… 

Development for the Super Nintendo World section for Universal Studios Japan is underway, and it’s set to open in 2020, just in time for the Tokyo Olympics. The Super Mario Bros. movie, currently in development by Despicable Me studio Illumination Entertainment in collaboration with Nintendo, also has a target window, with the movie currently scheduled to release in 2022.

And on a final note…

Nintendo announced that they’ll be opening a brand new Nintendo store in Shibuya, Nintendo Tokyo, which is set to be the first official Nintendo shop in Japan. It’ll sell a wide range of Nintendo games, consoles, and merchandise, as well as host events. It will be hosted in the Shibuya Parco building, which is currently under massive renovation, and is set to open in the Fall (Spring for us).

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About The Author
Oliver Brandt
Digital game collector, impulse spender, and news editor. I write reviews and report on cool Nintendo stuff. Also the number one Minecraft guy on the team. Mine Cart Madness is the worst thing to happen to video games.

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