Nintendo Misses Profit Estimates Amid Sluggish Game Lineup

Nintendo reported fiscal first-quarter profit that missed the lowest analyst estimate as consumers shrugged at a sluggish lineup of new games, according to Bloomberg.

Operating income slid about 10% to 27.4 billion yen ($252 million) in the three months ended June, the company said in a statement, less than the 37.2 billion yen average of analyst projections compiled by Bloomberg. Net sales inched up to 172.1 billion yen. Nintendo left its full-year profit and revenue outlooks unchanged. Its stock dropped as much as 4.3%, the most intraday in three months.

Nintendo in April put out earnings projections that fell far below analyst estimates despite a strong lineup of games for later this year and expectations for stronger hardware growth. The company is also releasing a cheaper version of its portable Switch gaming console and plans to enter the Chinese market. The anticipation has driven up Nintendo’s shares 39% this year.

The company kept its conservative forecast for operating profit of 260 billion yen on 1.25 trillion yen in revenue for the year ending March 2020. That’s far short of analyst expectations for 315 billion yen and 1.31 trillion yen respectively. The company expects to sell 18 million Switch units and 125 million new software titles. Smartphone game revenue rose 10% in the quarter from a year ago to 10 billion yen.

The Switch Lite will retail for $199.99, or $100 less than the original device, in time for the all-important holiday shopping season. The new console will be released Sept. 20 and comes in yellow, gray and turquoise. The cheaper Switch is aimed at expanding the market so more people will buy the company’s games.