Nintendo (NTDOY) ups full year guidance as Switch hits 52 million units sold

The Big N has to up their guidance as they hit most of their full year targets a whole quarter early. Furukawa, you have have some explaining to do. Please understand.

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Nintendo has just reported their financial results for the third quarter of their 2020 fiscal year ending in March. The company is upping their guidance for Net Sales, Operating Profit, Ordinary Profit, and Net Income on the back of better than projected Nintendo Switch sales. 

Nintendo upped their modified forecast by a little bit on the back of Switch sales momentum.
Nintendo upped their modified forecast by a little bit on the back of Switch sales momentum.

The Big N also upped the Year-end dividend payout to shareholders from the forecasted 490 yen to 620 yen per share. The new annual dividend is expected to be 890 yen/share or an effective annual yield of 2.10%. Nintendo almost hit their full year target of 18 million Nintendo Switch units sold during the most recent quarter, leading the company to increase their unit sales expectations for the full year of 2020 to 19.5 million units. Some analysts still think Nintendo is sandbagging their guidance as Animal Crossing: New Horizons is set to launch during Q4 of 2020 and could provide a nice boost to Switch hardware sales when the game releases later this Spring.

The company also increased their software unit sales expectations from 125 million units to 140 million units, but many analysts feel like Nintendo is grossly underestimating the draw of a new Animal Crossing game. The company also almost hit their full year software sales target a whole quarter early. Seems like the new management team has a case of underpromise-overdeliver. UPOD, it is!

Some software titles providing huge highlights to the company's solid sales performance were Pokemon Sword and Shield which combined to sell 16 million units since their launch last November. That's a lot of Pokemon sold considering this only accounts for 45 days of sales for those games. Other games released by Nintendo in fiscal 2020 also performed very well, with Luigi's Mansion 3 selling 5.37 million copies, Shacknews Game of the Year 2019 Super Mario Maker 2 selling 5.04 million copies, The Legend of Zelda: Link's Awakening selling 4.19 million copies, and Ring Fit Adventure selling 2.17 million copies since its launch in the Fall of 2019. Astral Chain and Marvel Ultimate Alliance 3: The Black Order were each able to squeak out 1 million copies in sales. All in all, Nintendo software continues to perform very well on the Switch. 


The Top 10 Best Selling Nintendo Switch Games of All-time

  • Mario Kart 8 Deluxe - 22.96 million units
  • Super Smash Bros. Ultimate - 17.68 million units
  • Super Mario Odyssey - 16.59 million units
  • The Legend of Zelda: Breath of the Wild - 16.34 million units
  • Pokemon Sword/Pokemon Shield - 16.06 million units
  • Pokemon: Let's Go, Pikachu!/Pokemon: Let's Go, Eevee! - 11.76 million units
  • Splatoon 2 - 9.81 million units
  • Super Mario Party - 9.12 million units
  • New Super Mario Bros. U Deluxe - 5.85 million units
  • Luigi's Mansion 3 - 5.37 million units

Nintendo is also benefitting from a shift from physically packaged software sales to digital sales. Digital sales of software have grown 48% from the first three quarters of fiscal 2019 to nearly 124.9 billion yen. This tops full year 2019 digital sales by the Big N. Digital sales are done at much higher margins, and this growth story is likely to continue for some time as players shift to buying more games on the eShop as opposed to in stores like GameStop.

Metroid Prime 4, Bayonetta 3, and BOTW 2 do not have release dates.
Metroid Prime 4, Bayonetta 3, and BOTW 2 do not have release dates.

Outside of Animal Crossing: New Horizons, there is not much on Nintendo's forecasted software release list that jumps out at me at this time. The Outer Worlds, Samurai Shodown, and Minecraft Dungeons are all big titles, but are already out or will launch on other platforms. Nintendo clearly is playing some things close to their vests, and hopefully we will have some clarity as to what we have to look forward to for fiscal 2021 when the company reports their full year 2020 financial results in April. We still have no idea when Breath of the Wild 2, Bayonetta 3, or Metroid Prime 4 will launch. 

That is all of the information I could find in this most recent Nintendo earnings release for the nine months ended December 31, 2019. Head over to the Nintendo Investor Relations website for more information and keep it locked on Shacknews for more financial news as it breaks in the video game and technology industries. 

CEO

Asif Khan is the CEO and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Tendobox.com. Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary's Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.

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