Earlier this week, Nintendo finally released their financial earnings report for the fiscal year ending March 31, 2020. We’ve already touched upon Nintendo’s burgeoning success across the board, but now the company has also offered their thoughts as well.
In an extra addendum to the main annual report, Nintendo first elaborated on the strong sales of Switch hardware within each major region. Japan saw the sharpest rise in Switch hardware sales, followed by North America and Europe respectively:
“Previously, we have addressed sell-in, or the number of sales from Nintendo to retailers, but we would like to turn the discussion to sell-through, which is the number of sales made from retailers to consumers. This graph [above] shows quarterly sell-through for the Nintendo Switch family. In all major regions, sell-through from January through March was higher than that of the same period in the previous fiscal year. In the Japanese market, the release of Animal Crossing: New Horizons drove hardware sales greatly, with console sell-through for the week of release reaching levels above weekly sell-through during the holiday season.
- Annual sell-through of the Nintendo Switch family in Japan during this fiscal year increased 33% over the previous fiscal year, with sell-through of 5.06 million units. The North American market saw a 20% rise over the previous fiscal year, to 7.67
million units. The European market saw a 19% rise over the previous fiscal year, to 5.37 million units.
- In the fourth quarter, the proportion of sell-through for Nintendo Switch Lite to the entire Nintendo Switch family was higher than that of sell-in. This is because inventories for Nintendo Switch Lite, which was just launched last September, were relatively plentiful at the start of the new year in markets outside of Japan, and sell-through for the system grew significantly together with that of the flagship Nintendo Switch both before and after the release of Animal Crossing: New Horizons.”
Next, Nintendo highlighted the success of Animal Crossing: New Horizons. An interesting tidbit they noted was that most players were existing fans of the series in their 20s-30s, with 40% being female.
“Combined sell-through of Animal Crossing: New Horizons, released on March 20, exceeded 13 million units in the first six weeks for the three regions of Japan, the US, and Europe, making it the fastest-starting title for Nintendo Switch. Moreover, sell-through for Animal Crossing: New Horizons has quickly exceeded the lifetime sell-through for the Nintendo 3DS entry Animal Crossing: New Leaf, making it the title with the highest sell-through in the Animal Crossing series. Not only have sales of the physical version exceeded our expectations, but demand for the digital version is also high, leading to a digital sales ratio never before seen in Nintendo Switch titles.
- In terms of consumer demographics, we are seeing a high percentage of players in their 20s and 30s who have likely played past entries in the Animal Crossing series, and a high overall percentage of female players, at over 40%. Among this group, many appear to have newly purchased a console in the Nintendo Switch family.”
After this was a discussion on the Switch’s digital sales so far. In particular, Nintendo cited the growing demand for digital versions of physical titles, indie titles, and Switch Online subscriptions as primary factors for a 71.8% growth in digital sales overall.
“Next, we would like to talk about our digital business on dedicated video game platforms.
- Digital sales for this fiscal year grew to 204.1 million yen, a 71.8% year-on-year increase. Software sales on our dedicated video game platforms contributed 34.0% of total digital sales.
- Downloadable versions of packaged software, especially Nintendo Switch software, made up 70.0% of the overall digital sales, and greatly contributed to growth.
- Other factors leading to growth include an increase in download-only software that is not sold physically, including indie titles, and growth in add-on content sales for titles such as Super Smash Bros. Ultimate and Fire Emblem: Three Houses. In addition, Nintendo Switch Online contributed to sales throughout the year.”
Last but not least, Nintendo discussed mobile games. While the company did not offer individual sales for each title, it highlighted Animal Crossing: Pocket Camp and Mario Kart Tour as growth factors during the past fiscal year:
Next, we would like to talk about our mobile and IP related businesses. Mobile, IP related income grew by 11.5% year-on-year to 51.2 billion yen.
- During this fiscal year, we began distribution of both Dr. Mario World (in July 2019) and Mario Kart Tour (in September 2019), bringing the total number of game applications we currently operate to six. The applications released in this fiscal year have contributed to our mobile application revenues, as has Animal Crossing: Pocket Camp, for which a subscription service was implemented last November. We are seeing a synergistic effect, with this application helping to spread awareness of Animal Crossing: New Horizons for Nintendo Switch, and our promotions for that title helping to greatly increase the number of active players of Animal Crossing: Pocket Camp.
- A multiplayer feature was added to Mario Kart Tour in March. Since the addition of this feature, the number of active players has been continuously increasing, and there are also increasing numbers of players subscribing to Gold Pass. US consumers represent approximately one third of all players, and sales in the US account for more than one third of total sales.
What do you think? Feel free to discuss your thoughts below.