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Nintendo operating income rises 88% despite weaker switch sales



Tokyo-

Nintendo
Co.


NTDOY -2.60%

said its operating income nearly doubled in the first quarter, as strong game software sales made a decline for its main switch game console more as compensation.

In the April-June quarter, Nintendo sold 1

.88 million handheld hybrid consoles, compared with 1.97 million a year earlier – right after the release in March 2017 – as component shortages made it difficult to keep pace with demand to keep.

The Kyoto-based company reported operating income of 30.5 billion yen ($ 274 million), up 168 billion yen ($ 1.51 billion), 88 percent up on the previous year's 16.2 Billions of yen in revenue of 154 billion yen.

The results indicate that Nintendo is on the right track to make the switch platform sustainable by selling games. The company announced that it sold 17.96 million Switch games in the first quarter, more than double the 8.14 million a year earlier, as the popular game "The Legend of Zelda: Breath of the Wild" went well ,

The Switch attracts customers who tend to buy many games, both packaged and digital downloads, and play them for a long time, Goldman Sachs analyst said

Masaru Sugiyama.

Nintendo's strategy is to make the Switch a popular online multiplayer fighting game, including "Fortnite" by Epic Games of North Carolina.

In addition to selling software, Nintendo is planning a subscription-based online gaming program similar to the services of

Sony

for the PlayStation and

Microsoft
Corp.

for the Xbox console

Strong software sales, both physical and digital, are likely to further boost Nintendo's operating profit, Sugiyama said in a recent report to customers.

Despite the strength in the software, a flaw The main reason for the subdued switch sales were the big game releases in the last quarter. In contrast, the Sony Corp. sold. 3.2 million PlayStation 4 consoles during the quarter thanks to the release of hit titles such as "God of War".

Nintendo reiterated its goal of selling 20 million switch consoles this fiscal year. Analysts are in agreement as to whether this is possible, but Nintendo is unlikely to change the plan until at least the release of new games scheduled for this fiscal year. Key titles include "Pokémon" and "Super Smash Bros.," and Nintendo said there will be more.

Nintendo's net profit in April / June was 30.6 billion yen, up from 21.3 billion yen a year earlier. Investors pay less attention to net assets as the company's large foreign exchange holdings fluctuate.

Write to Takashi Mochizuki at takashi.mochizuki@wsj.com


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