Nintendo powers to record profit, thanks to Zelda and Mario

Nintendo hit a new high for first-quarter profit after the successful launch of its latest Legend of Zelda game propped up flagging sales of its Switch console.

The Kyoto-based company reported operating profit of ¥185.44 billion ($1.97 billion), surpassing analyst estimates and its previous April-June quarterly high of ¥144.7 billion, set in 2020. Sales were ¥461.34 billion, significantly up from the year-earlier result of ¥307.5 billion.

Powering the strong figures was The Legend of Zelda: Tears of the Kingdom released to widespread critical acclaim in May. The latest instalment sold more than 10 million copies in its first three days and is already the ninth-best-selling title in Switch history with 18.51 million units, the company said on Thursday. The Super Mario Bros. Movie also helped nearly triple Nintendo’s licensing royalties.

“The Zelda game has legs and will continue to sell well through 2024,” said industry analyst Serkan Toto. “For the Mario movie, Nintendo was apparently able to squeeze more revenue out of its deal with partner Illumination than the typical Hollywood standard.”

The outstanding question for the company is what further steps it will take in the coming months to sustain momentum. The company has not announced any marquee games for the rest of the fiscal year through March, relying on established titles for the critical year-end shopping season.

Rival console makers Sony and Microsoft are gearing up for that period with ample hardware supply and major game releases in the works.

The Switch was released in 2017 and Nintendo President Shuntaro Furukawa has said sustaining its momentum will not be easy. The company has so far declined to discuss a successor to its flagship console, more than two years after Sony and Microsoft refreshed their hardware.

Bloomberg

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.