Switch and mobile games made 2016-17 a huge year for Nintendo
Nintendo’s financial results for the previous year just arrived and brought a wave of surprises for the investors and the company. From what we know, Nintendo has never performed this good since 2011. A huge portion of the finances goes to the well-performing Switch and the mobile gaming division. Analysts predicted a total of 2 million Nintendo Switch units to go out before the closing of the financial year. To everyone’s surprise, they were able to sell 2.74 million units; nearly a three-quarters of a million more units beyond their set target. The financial results cover March 31, 2016 to March 31, 2017.
The Nintendo Switch released on March 3 can be used as a handheld console or plugged into a TV. We first heard about the Switch sometime back in 2016 and it only created a wave of hype around this brand new console. The massive sales would not have been a surprise had it been launched during the holiday season. Furthermore, the huge sales have also caused a short supply of the Nintendo Switch. Not to mention, there are people who stockpiled this console to sell it at a 50% higher cost on eBay.
Legend of Zelda: Breath of the Wild bizarrely outsells the Switch itself
Why would anyone go so crazy for a console? Obviously, for the games. Legend of Zelda: Breath of the Wild bizarrely outsold the console itself. The financial report mentions a sale of 2.76 million copies of the game as compared to 2.74 million console units – a difference of 0.02 million. What is happening here? We can only assume that some fans bought the limited edition version of the game and bought another copy to actually play the game. The limited Master Edition of the game comes at a price of $129 whereas, the Special Edition costs $99.99. Additionally, Wii U owners also bought Zelda making the total 3.84 million. The vast popularity for the game has paved the way for a rebirth of Zelda merchandise including costumes, chess sets, mugs and other official collectors’ items.
Globally, 5.46 million copies of switch games were sold. We can imply that whoever bought a Switch might have bought at least two games on an average. Most certainly, one of the games was Zelda while other could be something else. Nintendo also launched 1-2 Switch, another game for the Nintendo Switch console. We find no mention of it in the financial report. It’s possible that it did not sell too well.
Mobile games hits key to massive 2016 for Nintendo
The mobile games business has brought tremendous profit to Nintendo. Take Pokemon GO for an example. Nintendo was sharing profit with the original creator Niantic. The game was so popular that even on profit sharing basis, Nintendo earned a massive $180 million from the game. We need to remember that the Nintendo’s share in the profit is quite little.
Super Mario Run has almost 150 million downloads. Unfortunately, only 10% of the players opt for the full version after the trial. On the other hand, Fire Emblem Heroes has only 15 million downloads but earned a lot more in comparison to Super Mario Run.
Firstly, we need to remember that Super Mario Run allows you to unlock the bulk of paid content with a one time fee. Whereas, Fire Emblem Heroes has a model where the player can keep dumping money to buy in-game perks. Thus, the latter model is more profitable for the company. Even so, Nintendo has no intention of switching focus to freemium games.
Revenue from the game “did not meet our expectations,” Nintendo President Tatsumi Kimishima.
“‘Heroes’ is an outlier,” a senior company official said. “We honestly prefer the ‘Super Mario Run’ model.”
Fire Emblem Heroes may not be that popular in the US, but the Japanese seem to have fallen in love with it. Japan contributes ¥11.8 billion whereas, the US market contributes ¥9.3 billion to Nintendo’s revenue.
Switch production plans
An explosive launch of the Nintendo Switch post release has brought up everyone’s hopes. Nintendo expects a sale of 10 million units in the 2017-18 fiscal year. Coupled with the stunning games in the release pipeline, we can expect the numbers to go all the way beyond their target. The Wall Street Journal report published sometime in March indicated that Nintendo would be producing 16 million Switch units instead of the 8 million planned before.
A different launch strategy to keep the buzz alive
As we discussed in one of the previous articles, Nintendo has a different strategy for its game releases. A strategy which keeps the hype around the Switch alive for a long time. Instead of launching too many games at once, Nintendo has planned to launch one or two games every month. This way, we will be seeing a constant buzz around the Switch throughout the year.
Speaking of which, Mario Kart 8 Deluxe saw the light of the day on Friday 28th April. Following this first party title, we will be seeing Arms come out on June 16th. Finally, on July 21st we can get our hands on long awaited Splatoon 2 With so many exciting games in the release pipeline, we can expect Nintendo to be making news every month. Oh, and just to remind all the Mario fans; Super Mario Odyssey would be coming to brighten this holiday season.