Nintendo feels it’s “possible to aim for growth that is unlike the life cycle of any other hardware to date” with Switch
Speaking during a conference call for Nintendo’s financial results, president Shuntaro Furukawa said it’s “possible to aim for growth that is unlike the life cycle of any other hardware to date” with Switch. Hardware sales have remained high, the system is now entering the middle of its life cycle, and consumers have the option of choosing between the original Switch and Switch Lite.
Furukawa made these remarks when asked by an investor about the differences in Nintendo’s outlook before and after the impact of the coronavirus started. We have that full exchange below.
I want to ask about the financial forecast for this fiscal year, specifically about differences in the outlook before and after the impact of COVID-19 expanded. How did you think the sales units of Nintendo Switch hardware would trend right after the report of third-quarter results in the last fiscal year (which was before the impact of COVID-19 expanded)? Also, the software sales volume forecast seems conservative. Does this have anything to do with a delay in development due to the impact of COVID-19?
Sales and profits for the fourth quarter of the last fiscal year both far exceeded the revised forecast announced in January 2020, and I think that was mostly due to the release of Animal Crossing: New Horizons. If you subtract the effect of that title, then the numbers in our forecast for this fiscal year are almost the same as the revised forecast for the previous fiscal year announced in January. Moreover, the numbers are relatively high compared to the initial earnings forecast announcement for last fiscal year and the actual results for the fiscal year ended March 2019. Nintendo Switch has just entered the middle of its life cycle, and there are two system versions in the family – Nintendo Switch and Nintendo Switch Lite – so we have not changed our view that it is possible to aim for growth that is unlike the life cycle of any other hardware to date. We also see this as an environment where we can continue to release software by focusing resources on software development for Nintendo Switch. Even before COVID-19 grew to have such a wide impact, we were forecasting nearly level sales of hardware for this fiscal year (meaning that sales volume would not increase significantly but remain at high levels) and intended to continue our work to broaden the Nintendo Switch install base. With regard to software, we put out an early-stage forecast reflecting the sales volume we thought would be possible this fiscal year if titles could be released as scheduled. We did not intend to be extremely conservative with the numbers, but the forecast reflected the momentum of the Nintendo Switch at the time.
