TOKYO
\nNintendo Co Ltd \u00a0expects its new Switch console to more than double annual operating profit and end the eight-year sales decline that dogged its previous offering just as players were turning to smart phone gaming.
\nThe Japanese firm entered the mobile gaming market last year to the relief of shareholders fretting about diving console sales. Now the early success of the Switch has fueled hope of a long-term earnings recovery and sent the firm\u2019s share price about 20 percent higher since the console\u2019s March debut.
\n\u201cWe are hoping to change the tide of our business with the Switch,\u201d Nintendo President Tatsumi Kimishima said at a news briefing on Thursday.
\nNintendo estimated profit to grow 2.2-fold to 65 billion yen ($584 million) in the year through March 2018, with sales jumping 53.3 percent. That was still far below the 104 billion yen average of 23 analyst estimates surveyed by Thomson Reuters I\/B\/E\/S.
\nAsked if the outlook was too low, Kimishima said the firm was stepping up marketing costs for the Switch.
\nNintendo aims to sell 10 million of the hybrid home console and handheld device this financial year, on top of a higher-than-expected 2.7 million sold in its debut month.
\n\u201cIf the 10 million target is achieved … that means the sales momentum would be close to the Wii,\u201d Nintendo\u2019s most successful console, Kimishima said.
\nThe Wii, launched in November 2006, sold about 20 million units in its first year and exceeded 100 million over its life. The last time Nintendo\u2019s sales grew was in the year ended March 2009, when Wii demand drove profit to a record 555 billion yen.
\nProfit from a new console typically peaks a couple of years after launch when there is a wide choice of game titles.
\nKimishima also said Nintendo\u2019s first own-brand smartphone game, Super Mario Run, has neared 150 million free downloads, but the number of users paying the one-off fee to unlock most of its content is below the target 10 percent.
\nOne reason behind the Switch\u2019s strong start is that unlike its predecessor Wii U, the console has a long list of game titles from independent studios because Nintendo made the Switch compatible with publicly available game development platforms from the start, said Hirokazu Hamamura, a director at Kadokawa Dwango Corp , which publishes games magazines.
\nSome analysts, however, are skeptical about the sustainability of the sales momentum.
\nCLSA analyst Jay Defibaugh in a recent report said, unlike the Wii, the early popularity was not being driven by games demonstrating defining characteristics, such as a controller with motion-detection camera, but by games that could equally appear on Sony Corp\u2019s \u00a0PlayStation or Microsoft Corp\u2019s Xbox.
\n\u201c(This) leaves Nintendo vulnerable to the structural shortage of third-party titles, deficient online offering, and weaker graphics,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"
TOKYO Nintendo Co Ltd \u00a0expects its new Switch console to more than double annual operating profit and end the eight-year sales decline that dogged its previous offering just as players were turning to smart phone gaming. The Japanese firm entered the mobile gaming market last year to the relief of shareholders fretting about diving console […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-17007","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"\n