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Nintendo Cuts Annual Profit Forecast 10% as Switch Sales Slow

A staff member sorts products at the Nintendo store in Shibuya district in Tokyo November 5, 2024. (AFP)
A staff member sorts products at the Nintendo store in Shibuya district in Tokyo November 5, 2024. (AFP)
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Nintendo Cuts Annual Profit Forecast 10% as Switch Sales Slow

A staff member sorts products at the Nintendo store in Shibuya district in Tokyo November 5, 2024. (AFP)
A staff member sorts products at the Nintendo store in Shibuya district in Tokyo November 5, 2024. (AFP)

Nintendo cut on Tuesday its operating profit forecast for the year to March 2025 by 10% to 360 billion yen ($2.36 billion), as its ageing Switch console loses steam.

The latest forecast is below analyst estimates of a 391.4 billion yen profit.

The Kyoto-based gaming company sold 4.7 million Switch consoles in the first half of the financial year. That compares with 6.8 million units sold in the same period a year earlier.

Nintendo lowered its full-year sales forecast for the console, which is in its eighth year on the market, by 7% to 12.5 million units. That would be down 20% from actual Switch sales of 15.7 million units a year earlier.

It also revised down its annual software sales forecast by 3% to 160 million units.

"For a platform that is in its 8th year in the market, both hardware and software enjoy stable demand and brisk sales," Nintendo President Shuntaro Furukawa told an online press conference.

"But sales so far fell short of our original projections. Taking into consideration their sales in the first half, we revised our forecasts for both hardware and software, and that led to the earnings revision."

Furukawa said there was no change to Nintendo's plan to announce a successor to its long-lasting Switch console in the current financial year, but did not go into specifics.

Shares in Nintendo closed down 3.9% ahead of the earnings announcements, underperforming the Nikkei average's 1.1% gain.

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PlayStation at 30: How Sony's Grey Box Conquered Gaming

The little grey box sold 102 million units. Richard A. Brooks / AFP
The little grey box sold 102 million units. Richard A. Brooks / AFP
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PlayStation at 30: How Sony's Grey Box Conquered Gaming

The little grey box sold 102 million units. Richard A. Brooks / AFP
The little grey box sold 102 million units. Richard A. Brooks / AFP

Japanese electronics giant Sony is set to celebrate 30 years since it launched the PlayStation console, the little grey box that catapulted the firm into the gaming big league.
PlayStation was Sony's first foray into the world of video games and when it hit the shelves in Japan on December 3, 1994, the company needed to sell one million units to cover its costs, AFP said.
In the end, the gadget became a legend, selling more than 102 million units, helping to launch many of the industry's best-loved franchises and positioning Sony as a heavyweight in a hugely lucrative sector.
"PlayStation changed the history of video games," said Hiroyuki Maeda, a Japanese specialist in video game history.
"It truly transformed everything: hardware, software, distribution and marketing."
One of the keys to its success was broadening the appeal of a pastime that had often been dismissed as a hobby for children.
From the off, the firm was clear that it wanted to trash this image.
In part this stems from Sony's rivalry with Nintendo, which was already a dominant player in the sector by the mid-1990s, but whose games skewed young.
Sony 'humiliated'
The original PlayStation can trace its history to a falling out between the two great Japanese firms.
They had partnered in the late 1980s to develop a version of the Super Nintendo console with an in-built CD player.
But Nintendo suspected Sony were using the project as a way to muscle into the gaming sector and abruptly cancelled the partnership in 1991.
"Sony found itself in a humiliating position," said Maeda, so pushed ahead with the project by itself.
The hardware proved to be revolutionary, CD-ROMs being cheaper and storing much more data than the cartridges used by Nintendo and other consoles.
And to further distinguish itself from Nintendo, Sony courted a young adult audience with fighting games like "Tekken", out-and-out horror with "Resident Evil" and "Silent Hill", and military titles like "Metal Gear Solid".
Its advertising also followed a more grown-up path.
Hollywood auteur David Lynch was drafted in to direct ads for the PS2 launched in 2000 -- conjuring a nightmare vision of floating heads and talking ducks certainly not meant for younger audiences.
"The older audience obviously had better purchasing power than children," said Philippe Dubois, founder of M05, a French association that aims to preserve digital heritage.
The PS2 is still the most successful console in history, having sold more than 160 million units.
'New sensations'
Over the past 30 years, the competition has intensified and the technology has been honed.
While Sega and other rivals have fallen by the wayside, Microsoft has entered the fray with its Xbox, and Nintendo is still on the scene with its Switch console.
But the industry is enduring tough times.
A surge in popularity and investment during the pandemic has subsided and Sony's PlayStation division recently laid off hundreds of workers.
Plenty of analysts are also predicting that cloud gaming will soon render consoles obsolete.
Sony appears undaunted though, recently launching an upgraded version of its PS5 with a marketing push that highlighted new AI features.
Bloomberg has reported that the Japanese firm is also planning a new hand-held version of the PlayStation, which would once again pit it against old rival Nintendo, undisputed king of portable devices.
However, for the purists, few innovations were as great as the original console's ability to handle 3D graphics.
The technology was instrumental for the appeal of classic games such as "Tomb Raider" and "Final Fantasy VII".
"We discovered sensations, emotions that we hadn't experienced with earlier consoles," said French YouTuber and PlayStation enthusiast Cyril 2.0.
He said he had collected almost every title released for the PlayStation in Europe -- some 1,400 -- and insisted the formula for success was not complicated.
"For consoles, games are still the most important thing," he said.