Nintendo expects to sell less Switch games and hardware this fiscal year, lowering total earnings throughout the year. This could telegraph lower Switch exclusives.
It's possible Nintendo's rumored Mario remasters will be the only major first-party Switch games launched this fiscal year. The company just reported stellar FY2020 earnings thanks to major first-party sales of Animal Crossing: New Horizons and Pokemon: Sword and Shield, both of which surged software sales by 42% . The Switch Lite's strong 6.19 million start also helped push Switch hardware sales to 21.03 million fro the year.
This momentum won't continue for this year--at least Nintendo doesn't think so. For this fiscal year, FY2021, Nintendo laid out conservative forecasts. The company expects net revenues to drop by 8.3% to $11.24 billion, operating income to dip by almost 15% to $2.81 billion, and total profits to plummet by 22% to $1.874 billion.
Nintendo FY2021 Guidance by the Numbers
- Net Revenues - $11.24 billion (¥1.2 trillion) down 8.3% YoY
- Operating Income - $2.81 billion (¥300 billion), down 14.9% YoY
- Profit - $1.874 billion (¥200 billion), down 22.7% YoY
Nintendo Switch hardware and software sales are also expected to dip, which could simply be conservative on Nintendo's part, or it could reflect what's to come this year, e.g. a smaller slate. Rumor has it Nintendo will launch a number of Mario remasters and re-releases this year to celebrate the plumber's 35th anniversary.
FY2020 was lightning in a bottle with Pokemon and Animal Crossing in the same period--AC: New Horizons sold 11 million copies in 11 days and accounted for nearly 7% of all Switch software sales in the year despite launching just two weeks before the FY ended--and FY2021 may lack heavy-hitters.
Gamers buy Switch consoles to play first-party titles. In FY2020 alone, first-party titles made up 82.2% of all Nintendo Switch game sales.