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Thursday, April 25, 2019

Nintendo's Results For Fiscal Year Ending March 2019

By LUDWIG VON KOOPA - Dreary outlook. But hey, the dividend went up. I'll take that.

Well, Nintendo's stock fell over four-and-a-half percent today due to conservative guidance, and them failing to meet their hardware plans. Between April 1 2018 and March 31 2019, they sold 16.95 million Nintendo Switch systems and 118.55 million software titles. I'll remind you their goal was 20 million systems and 100 million games, so they crushed the latter goal. No one's taking about that though. Just the hardware bit.

Investors are also upset there's no immediate announcement about a Nintendo Switch hardware revision, which has been discussed in the media as a basically-guaranteed rumour, though I haven't mentioned it on KoopaTV because I don't like giving credibility to rumours like that which can affect a stock price. And, of course, caution is on my side today.

Here's some updated sales figures Nintendo provided of the “bottom tier” of the top 10 (or former top 10):

Nintendo Switch software sales data Kirby Star Allies Mario Tennis Aces Donkey Kong Country Tropical Freeze
Note: The Nintendo Labo Variety Kit has sold 1.09 million units, but the Nintendo Labo figure on the chart is for
all kits combined when Nintendo disclosed that a long time ago.
Also, for three years now, Ludwig has thought that March is 30 days long.

Pretty clear that ARMS is still ahead of the entire Nintendo Labo franchise, though Nintendo isn't going to give any specific numbers on either of those anymore.

They also aren't providing an explanation for something very strange in their financial data I picked up on.

They've put 5,584 million yen in the fourth quarter (sometime between January 1 and March 31 2019) as an extraordinary loss, with 4,622 million yen as an impairment loss. That's a bit over 41 million dollars. What was impaired? They never said. It could be anything. Could be an abandoned warehouse full of Nintendo Labo they're throwing in the dumpster because they'll never sell them. That's a very material amount. They gotta explain that. As someone with Nintendo stock, I'm not pleased with that lack of transparency.

Anyway, Nintendo's new goals between April 1 2019 and March 31 2020? 18 million more Switch consoles sold, and 125 million more software units.

While I was writing this article, Nintendo released President Shuntaro Furukawa's Financial Results Briefing, which has a few more interesting tidbits. Nintendo Switch Online paying account memberships are now over 9.8 million, and Tetris 99 has been playing by 2.8 million accounts. (One ponders why everyone hasn't given it a try since it's free. I tried Tetris 99, and I didn't like it, but I'm still in that 2.8 million!)

He also added that Pokémon, Let's Go was created to emphasise the Switch's TV mode appeal, and Pokémon Sword and Pokémon Shield are being created to emphasise the Switch's handheld mode appeal. That means all of the complainers when Pokémon Sword & Shield were announced saying it doesn't feel like the Pokémon console game of their dreams are correct... and it's intentional. And I'm fine with that.

There's a Mario Kart Tour Android beta you can sign up for now. I don't recommend it. Super Mario Maker 2 comes out at the end of June. Whatever.

That's about it. Nothing very exciting. Not really a “big deal in terms of news and interesting analysis” like I thought it'd be.

Oh! Nintendo released a one-sentence press release that they will be working with Tencent to get the Nintendo Switch into China. They just have no idea when, and there's a good chance that's a 2020 initiative instead of 2019. That's sure to help the numbers whenever it happens.

Ludwig has invested his retirement account into Nintendo stock, and for most of that duration the stock has been under the amount he bought it at. Dividends at least make up for a little bit of that loss. Anyway, feel free to think something is much more interesting than what Ludwig thinks is interesting.

Click here for the article a year ago about the fiscal year ending March 2018.
This is the article for nine months into the fiscal year ending March 2019 (aka December 31 2018).
Here is the article on the following investor question and answer session.
Next quarter (ending June 30) there's nothing interesting disclosed.
Click here for the article in the future about the fiscal year ending March 2020.

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