Japan’s Nintendo climbs after boosting forecast by 50 per cent on pandemic gaming demand

Nintendo gained after the Japanese company made an unusual decision to increase financial forecasts midway through the financial year, a sign of robust gaming demand from consumers stuck at home during the pandemic.

Nintendo’s shares rose as much as 4.1 per cent, the most on an intraday basis since August. They are up more than 35 per cent for the year.

The company is now projecting 450 billion yen (US$4.3 billion) of operating profit for the year, up 50 per cent from the previous 300 billion yen. It boosted its revenue forecast to 1.4 trillion yen, from 1.2 trillion yen, and its Switch gaming console forecast to 24 million units, up from 19 million.

Nintendo also reported an operating profit of 146.7 billion yen for the September quarter, compared with the 96.2 billion yen average estimate. Revenue came to 411 billion yen, versus the 321.4 billion yen anticipated.

“So another blowout quarter. These are type of (operating profit) levels we tend to see in the current holiday quarters,” Amir Anvarzadeh, a market strategist at Asymmetric Advisors in Singapore, wrote in a research note. “So we will have 3 Xmas quarters in one term.”

The rare midyear outlook hike underscores how the gaming industry is riding a Covid-era surge. The Japanese developer of hit franchises from Mario to Zelda has outperformed thanks in part to Animal Crossing, which emerged as the online forum of choice for millions during the pandemic. It is one of few gaming companies to report an increase in revenue from the June quarter to the September quarter.