GAMES PEOPLE PLAY A customer looks at shelves displaying Nintendo video games and accessories at the gaming section of a shop in Tokyo on Monday, May 9, 2022. AFP PHOTO
GAMES PEOPLE PLAY A customer looks at shelves displaying Nintendo video games and accessories at the gaming section of a shop in Tokyo on Monday, May 9, 2022. AFP PHOTO

TOKYO: Nintendo on Tuesday reported a solid net income for the financial year to March on the strong performance of its blockbuster Switch console, but issued a cautious forecast.

Uncertainties linked to the global chip shortage and potential production and transport delays caused by Covid-19 lockdowns could hit future earnings, the Japanese gaming giant warned.

The company, which has benefited from a string of popular titles, including "Pokemon Legends: Arceus," posted a 2021-2022 net profit of 477.7 billion yen ($3.7 billion), down 0.6 percent from a year earlier. But it expects to earn 340 billion yen for the current financial year, a year-on-year drop of about 29 percent.

Nintendo's profits soared on the back of a boom in demand for video games during the coronavirus pandemic and the runaway popularity of the Switch, which was launched in March 2017.

Get the latest news
delivered to your inbox
Sign up for The Manila Times’ daily newsletters
By signing up with an email address, I acknowledge that I have read and agree to the Terms of Service and Privacy Policy.

It also released the Switch Lite in 2019, and the Switch OLED, with upgraded graphics and memory, in October 2021.

Growth in sales of these consoles "demonstrated a good balance between each of the three individual models," Nintendo said.

"As a result of [a] stable performance among the overall hardware lineup, final sales totaled 23.06 million units" in the last financial year, it added.

Software sales also grew 1.8 percent to 235 million units from a year earlier, the gaming firm said, "making it the highest annual software sales figure ever posted for a Nintendo platform to date."

Highlights included "Mario Party Superstars" and its three "Pokemon" titles. The most popular was "Pokemon Legends: Arceus," which sold 12.6 million units in the last financial year.

Hideki Yasuda, senior analyst at Toyo Securities, told Agence France-Presse that Nintendo was "doing very well," calling the weaker yen and the strong performance of "Arceus" a "double benefit."

But he warned that the company may find itself "unable to make hardware and unable to move products" as cargo ships wait in waters off Shanghai, which is under lockdown as China tries to stamp out the persistent Covid-19 outbreak there.

Nintendo said "if Covid-19 interferes with production or transportation in the future, this might impact the supply of products," warning that production might also be affected by the chip shortage.

Serkan Toto, an analyst at Kantan Games in Tokyo, said the Switch had been key to Nintendo's success.

"For the first time in over 30 years, Nintendo is only focusing on one system," instead of dividing its resources between different businesses, such as television consoles and handheld gaming devices, he added.