Nintendo Reports great switch and zelda sales in its 2016 Fiscal Year Earnings release

Nintendo Switch: 2.74 million units
The Legend of Zelda: Breath of the Wild: 3.84 million (2.76 on the Switch, 1.08 on the Wii U)
Pokémon Sun & Moon: 15.44 million

These numbers are amazing and blew every analysts expectation out of the water. Nintendo is aiming at 10 million more switch units shipped before the end of their next fiscal year(march 2018). With the tremendous response for their new system, i definitley can see it happening. Below is the report taken from the official nintendo website.

https://www.nintendo.co.jp/ir/pdf/2017/170427e.pdf

1. Operating Results and Financial Positions for the Fiscal Year Ended March 31, 2017

Net cash provided by (used in) operating activities: Net cash provided by (used in) investing activities: Net cash provided by (used in) financing activities: (2) Financial positions as of March 31, 2017 Total assets increased by 172.0 billion yen compared to the prior fiscal year-end to 1,468.9 billion yen mainly due to an increase in cash and deposits as well as notes and accounts receivable-trade. Total liabilities increased by 82.0 billion yen compared to the prior fiscal year-end to 218.0 billion yen mainly due to an increase in notes and accounts payable-trade. Net assets increased by 90.0 billion yen compared to the prior fiscal year-end to 1,250.9 billion yen. (3) Cash flows for the fiscal year ended March 31, 2017 The ending balance of “Cash and cash equivalents” (collectively, “Cash”) as of March 31, 2017 was 330.9 billion yen, with an increase of 72.8 billion yen during the fiscal year. During the prior fiscal year, there was a decrease of 23.4 billion yen. Net increase (decrease) of Cash and contributing factors during the fiscal year ended March 31, 2017 are as follows: There were decreasing factors contributing to 114.7 billion yen of profit before income taxes such as a record of gain on sales of short-term and long-term investment securities and an increase in notes and accounts receivable – trade. However, due to increasing factors such as a decrease in notes and accounts payable – trade, net cash resulted in an increase of 19.1 billion yen compared to an increase of 55.1 billion yen during the prior year. Net cash from investing activities increased by 69.5 billion yen compared to a decrease of 71.7 billion yen during the prior year mainly due to proceeds from withdrawal of time deposits and sales and redemption of short-term and long-term investment securities exceeding payments into time deposits and purchase of short-term and long-term investment securities. Net cash from financing activities decreased by 14.4 billion yen compared to a decrease of 2.9 billion yen during the prior year mainly due to payments of cash dividends. (1) Operating results for the fiscal year ended March 31, 2017 Nintendo Switch, a new home console system that diversifies the ways you can play games, launched during this period on March 3 worldwide and is off to a promising start. In particular, The Legend of Zelda: Breath of the Wild has won immense popularity with recorded sales of 2.76 million units (the total units sold including the Wii U version is 3.84 million units) and 1-2-Switch has been generating buzz. Both of these games were released at the same time as the hardware. The sales volume for hardware and software during this period reached 2.74 million units and 5.46 million units respectively. Sales volume for the Nintendo 3DS software also grew favorably. In addition to Pokémon Sun and Pokémon Moon, which released worldwide in November and generated a tremendous amount of buzz with recorded sales of 15.44 million units, Super Mario Maker for Nintendo 3DS sold 2.34 million units and Kirby: Planet Robobot sold 1.36 million units. The release of the smart device application Pokémon GO led to increased sales of software in the Pokémon series and drove the Nintendo 3DS family hardware sales growth outside of Japan. The worldwide sales volume for the Nintendo 3DS hardware this period was 7.27 million units (7% increase on a year-on-year basis), while the Nintendo 3DS software sales volume reached 55.08 million units (14% increase on a year-on-year basis). For Wii U, while The Legend of Zelda: Breath of the Wild released worldwide in March and reached sales of 1.08 million units, the Wii U software sales volume during this period was 14.8 million units (46% decrease on a year-on-year basis) and hardware sales were in alignment with our expectations at the start of the fiscal year, decreasing to a sales volume of 760 thousand units (77% decrease on a year-on-year basis). On the smart device front, we released Super Mario Run, a new action game application featuring Mario, in December for the iOS and March for the Android. This title elicited a fantastic response from consumers worldwide. Furthermore, we released Fire Emblem Heroes, a full-fledged simulation RPG game application that can be enjoyed casually on smart devices, in February. The game is being enjoyed by both long-time fans of the Fire Emblem series and consumers who have never played the series on dedicated video game systems. The Nintendo Entertainment System: NES Classic Edition also launched in Japan and overseas in November to widespread popularity. Although the release of some new titles offering amiibo functionality restored some momentum, amiibo sales remained limited to 9.1 million units for figure-type and 9.3 million units for card-type. In addition, there were relatively fewer offerings of downloadable content during this period, so digital sales were also down to a large extent on the same period last year. These factors resulted in an operating profit of 489.0 billion yen against net sales of 29.3 billion yen (of which 359.0 billion yen, or 73.4% of the total sales, were overseas sales). We have also included 50.3 billion yen share of profit of entities accounted for using the equity method related to The Pokémon Company and other investments, resulting in an ordinary profit of 20.2 billion yen. In addition, due to the sale of part of our equity in the company that manages the Seattle Mariners Major League Baseball team, we recorded gain on sales of investment securities totaling 64.5 billion yen as extraordinary income, meaning that the net profit attributable to owners of parent was 102.5 billion yen.

 

2.Outlook for the Fiscal Year Ending March 31, 2018

3. Basic Policy of Profit Distribution and Dividends It is the Company’s basic policy to internally provide the capital necessary to fund future growth, including capital investments, and to maintain a strong and liquid financial position in preparation for changes in the business environment and intensified competition. As for direct profit returns to our shareholders, dividends are paid based on profit levels achieved in each fiscal period. The annual dividend per share will be established at the higher of the amount calculated by dividing 33% of consolidated operating profit by the total number of outstanding shares, excluding treasury shares, as of the end of the fiscal year rounded up to the 10 yen digit, and the amount calculated based on the 50% consolidated profit standard rounded up to the 10 yen digit. The end of 2nd quarter (interim) dividend per share is calculated by dividing 33% of consolidated operating profit by the total number of outstanding shares, excluding treasury shares, as of the end of the six-month period rounded up to the 10 yen digit. As a result, the dividend for the fiscal year ended March 31, 2017 has been established at 430 yen (interim: no dividend, year-end: 430 yen) and dividend for fiscal year ending March 31, 2018 will be 190 yen if earnings are in line with the financial forecast herein. The end of 2nd quarter dividends are yet to be determined as there are no interim financial forecasts, but there are no changes to our dividend policy. Retained earnings are maintained for effective use in research of new technology and development of new products and services, capital investments and securing materials, enhancement of selling power including advertisements, strengthening of network infrastructure, and treasury share buyback whenever deemed appropriate. [Note] Forecasts announced by the Company referred to above were prepared based on management’s assumptions with information available at this time and therefore involve known and unknown risks and uncertainties. Please note such risks and uncertainties may cause the actual results to be materially different from the forecasts (earnings forecast, dividend forecast and other forecasts). Regarding Nintendo Switch, we will maintain buzz about The Legend of Zelda: Breath of the Wild and 1-2-Switch, which are off to a phenomenal start, and release Mario Kart 8 Deluxe in April and ARMS in June worldwide. We will release Splatoon 2 in July. Splatoon 2 exemplifies the concept of Nintendo Switch, enabling consumers to play anywhere, anytime, and with anyone, and will bring competition between consumers to new levels of excitement. In addition, we will maintain favorable conditions surrounding Nintendo Switch by providing a continuous stream of appealing third-party titles across varying genres. We aim to stimulate the platform and expand sales going into the holiday season this year. Total sales volume for the Nintendo 3DS hardware worldwide has surpassed 66 million units and it has developed into a platform that we can rely on for software sales. We will release Fire Emblem Echoes: Shadows of Valentia overseas in May (April in Japan) and plan to release Ever Oasis and Hey! Pikmin in June and July. Furthermore, this year is Kirby’s 25th anniversary, so we are planning to release downloadable titles and a new multiplayer action game for Nintendo 3DS. Third-party developers have also announced major titles for Nintendo 3DS. During this period we will continue striving to maintain the momentum of the platform and to reach a broader audience, including females and children, across the world. In the smart-device business, we released three game applications during this period, each with different playstyles and profit models. We were able to present opportunities for consumers who had never played Nintendo games before and those who live in regions we had previously been unable to reach to experience Nintendo’s intellectual property (Nintendo IP) and the different worlds featured in Nintendo games. Going forward we will endeavor to expand our smart-device business by making use of the experience we have gained so far to provide new game applications, while also focusing on continued operations for our released applications so that consumers can enjoy playing them for a long time. Based on these efforts, we project a net sales of 750.0 billion yen, an operating profit of 65.0 billion yen, an ordinary profit of 60.0 billion yen and a net profit attributable to owners of parent of 45.0 billion yen. Unit sales of the major products used for the forecast are listed on page 15 under the heading of “(4) Consolidated sales units, number of new titles, and sales units forecast” in the “Others” section. Exchange rate assumptions for the major currencies used for the forecasts are 105 yen per US dollar and 115 yen per euro.

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