Japanese game company Nintendo reports a jump in profit on the popularity of its Switch 2

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Category: Business

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Unlocking Word Meanings

Read the following words/expressions found in today’s article.

  1. console / ˈkɒn soʊl / (n.) – an electronic device used to play video games
    Example:

    She bought a new gaming console for her children.


  2. bottom line / ˈbɒt əm laɪn / (n.) – (as in finance) the total profit or loss of a company after its costs and expenses are considered
    Example:

    Lower sales had a negative effect on the company’s bottom line.


  3. dip / dɪp / (v.) – to decrease for a short time or by a small amount
    Example:

    After rising for several months, the company’s sales dipped slightly in June.


  4. rake in / reɪk ɪn / (phrasal v.) – to earn or receive a lot of money, usually in a short period of time or because something is very successful
    Example:

    The new movie was very popular and raked in millions of dollars at the box office.


  5. project / prəˈdʒɛkt / (v.) – to estimate what will happen in the future, usually by using information from the present or the past
    Example:

    Experts are projecting that the city’s population will grow by 10% over the next five years.


Article

Read the text below.

Nintendo’s first-quarter profit surged 53.5% as the popularity of its recent Super Mario movie worked with solid demand for the Switch 2 gaming console to support the Japanese video-game company’s bottom line.


Kyoto-based Nintendo Co. reported 147.4 billion yen ($933 million) in April-June profit, up from 96 billion yen in the same period a year ago. Quarterly sales dipped 9.5% to 517.8 billion yen ($3.3 billion).


Working as a negative for Nintendo, as with many Japanese companies, were U.S. President Donald Trump’s tariffs, as well as the rising price of memory chips and other components.


Nintendo is forecasting 310 billion yen ($2 billion) in profit for the full fiscal year through March 2027, down nearly 27% from the previous fiscal year, on annual sales slipping 11% to 2.05 trillion yen ($13 billion).


Nintendo said sales of Switch 2 machines totaled 3.82 million globally. Nintendo’s older Switch business is still holding up, with both console and software sales continuing, even as the new machine is also in demand.


In Switch 2 software, “Yoshi and the Mysterious Book,” released in May, and “Pokémon Pokopia,” released last year, were popular, leading to software sales totaling 9.46 million units for the quarter, according to Nintendo.


“The Super Mario Galaxy Movie” raked in massive box-office revenue, much of it from overseas.


The Nintendo Switch 2, which went on sale in June last year, is still going strong, the company said.


Nintendo hopes to keep building on the momentum by adding more games to the lineup, including “Splatoon Raiders,” which went on sale last month, as well as new games in the works, such as “The Legend of Zelda: Ocarina of Time.”


Nintendo is projecting Switch 2 console sales to total 16.5 million units for the fiscal year, down nearly 17% from the previous year. Console sales tend to drop after the first strong year.


Nintendo is expecting strong game software sales at 60 million units for the fiscal year, up 23%.


Nintendo shares jumped 2.9% in Tokyo trading after earnings results were announced.


This article was provided by The Associated Press.


Viewpoint Discussion

Enjoy a discussion with your tutor.

Discussion A

  • Nintendo’s profit grew strongly as the popularity of its Super Mario movie worked together with demand for the Switch 2. Do you think a company is safer when its success comes from several products instead of one major product? Why or why not? Discuss.
  • Nintendo’s quarterly sales dipped 9.5%, but its profit surged 53.5%. In your opinion, what could a company do when its sales are falling but it still wants to improve its profits (ex. create different types of products)? Would you be more impressed by a company that sells more products or one that makes more profit? Why? Discuss.

Discussion B

  • Nintendo expects Switch 2 sales to fall nearly 17% compared with the previous year, noting that console sales tend to drop after the first strong year. Why do you think people sometimes lose interest in something after the excitement of the first year? Discuss.
  • If you were in charge of Nintendo’s sales, what strategies would you use to keep the sales high, considering that sales may drop after the first strong year? Discuss.