Nintendo has defied tradition to raise its financial forecasts midway through the current fiscal year, citing increased demand for Switch hardware and software during a period which has been marked by the ongoing COVID-19 pandemic.
Nintendo is now confidently predicting that it will make 450 billion yen ($4.3 billion) of operating profit for the current financial year – a 50% boost from its previous projection of 300 billion yen. Revenue is forecast to hit 1.4 trillion yen (up from 1.2 trillion yen) while Switch hardware sales for the year are estimated to surpass the previous target of 19 million and instead hit a very respectable 24 million units.
On top of this, Nintendo has managed an impressive operating profit of 146.7 billion yen for the September quarter (96.2 billion yen had been previously projected), while revenue came to 411 billion yen; 321.4 billion yen was the predicted total.
The impact of COVID-19 is being cited as a key factor for these figures; with the pandemic gripping the globe for most of 2020, consumers have turned to in-house forms of entertainment like video games to occupy them during prolonged periods of enforced lockdown.
The pandemic caught Nintendo off-guard as it struggled to keep pace with demand for Switch hardware earlier in the year, but President Shuntaro Furukawa has stated that the supply chain is now running at full capacity:
The Switch hardware momentum remains strong, and we think that’s because production has recovered so customers who were previously unable to find a Switch on store shelves are now able to. The Switch production situation has now completely recovered and we have no issues with that.
Despite the impending arrival of the PlayStation 5 and Xbox Series X, Nintendo's results give the company ample reason to remain bullish during the final part of the fiscal year – although in typical Nintendo fashion, Furukawa refused to succumb to overconfidence when, during a conference call following the publication of the company's financial results, he was asked if the projection was "too conservative":
For the second half, we’d like to see how the holiday season turns out.