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.
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.
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.
This is Furukawa math ... complete garbage— SeattleDave (@alphaverve) January 30, 2020
Nintendo raised its FY Switch sales forecast to 19.5 million from 18 million. But analysts say the new number would still be low. Morningstar says more than 20 million is for sure. pic.twitter.com/OJFHMw72cc— Takashi Mochizuki (@mochi_wsj) January 30, 2020
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!
This is not low-balling, it's a mockery. Absurd, and not for the first time. https://t.co/LajPty8XCE— Dr. Serkan Toto / Kantan Games Inc. (@serkantoto) January 30, 2020
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.
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.
Asif Khan posted a new article, Nintendo (NTDOY) ups full year guidance as Switch hits 52 million units sold
NTDOY literally opened one penny below my daily sell signal target. $48.68/share was the open, look for a close above $48.69/share to set up a potential reversal strategy for tomorrow, but it could get ugly today as long as the stock remains below $48.69/share.
Luckily this is only a daily sell signal, as the stock sits inside the previous year's range as well as the previous quarter's range. This selloff could continue tomorrow, but we'll have to see how the stock closes today.