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Nintendo Reports Major Increases In Profits, But Anticipates A Drop This Year

Switch & Lite© Nintendo Life

Nintendo’s annual financial report has plenty of good news for those that enjoy seeing the company flourish, with 2020 / 2021 delivering outstanding sales figures across the Nintendo Switch range and the broader business reporting monster profits once again.

This article will focus on the money, but if you’re more interested in sales figures for systems and games, the below articles have you covered.

With that out of the way, let’s get to the numbers (they’re pretty big, in summary):

Net Sales (overall sales for the company) – 1,758.9 billion Yen (approx $16.1 billion USD) – +34.4% on previous year.

Operating Profit (profit after operational deductions) – 640.6 billion Yen (approx $5.9 billion USD) – +81.8% on previous year

Net Profit (profit after all deductions) – 480.3 billion (approx $4.4 billion USD) – +85.7% on previous years.

They’re big numbers, with the company achieving notable profits, not just sales. Outstanding popularity of the Switch and major games, along with likely increased efficiency in manufacturing costs, among other things, means that Nintendo is establishing cash resources that provide incredible stability. Rather like in the Wii and DS era, these are boom times for the company that will tide it over if it encounters more challenging periods in the future.

It’s worth noting, however, that Nintendo and gaming benefited significantly due to the unique circumstances of the past year.

As context for the stability of those finances, Nintendo states that its ‘cash and cash equivalents’ (not including other assets and forms of wealth) is currently 932 billion yen (approx $8.5 billion USD). This cash total increased by nearly a third over the past year.

It’s worth noting, however, that Nintendo and gaming benefited significantly due to the unique circumstances of the past year. Nintendo estimates net sales to drop by 9% in the coming year, with net profit expected to come out at a drop of 29.2%. Even if those declines do happen, however, the company will still be making impressive profits.

There are, however, a lot of uncertainties that’ll influence and potentially cause drops in operating profit, for example. Nintendo has cited ongoing uncertainties over Covid-19 as a factor, along with issues procuring parts for manufacturing (Nintendo’s forecasts are ‘based on the premise’ that Nintendo will secure the parts and resources it needs). We also need to see what the second half of the year will include from Nintendo in terms of major games, products and (maybe) hardware iterations.

In summary though? Nintendo is doing extremely well.

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