Nintendo's Q3 FY22 performance nearly matches last year's record-setting holiday period.
Nintendo recently announced its Q3 earnings for the Holiday 2021 timeframe, and the results are stellar. Nintendo set new milestones for profit and software sales, and overall net sales nearly matched 2020 pandemic highs. In this article we'll be using USD conversions based on Nintendo's historical forex rates provided in its documents and investor briefs. All values given are rounded.
First let's take a look at net sales, which were roughly $6.047 billion (695.946 billion yen). Overall net sales delivered strong results and represent the second highest point in Nintendo history, driven by the full conjunction of Nintendo's entire operating business: games hardware, software, digital services and subscriptions, mobile games, and playing cards/accessories.
Operating profit, which is earnings after operating expenses, was at $2.19 billion (252.592 billion yen). This is another metric that's second only to 2020's record highs. Strong operating profit was delivered by a rush of digital-based software sales, first-party game sales, and hardware sell-through.
Total profits, or earnings after income taxes and all expenses, was a record $1.7 billion. Nintendo made more profit in Q3'22 than it did in any other third quarter period in Switch history, driven by the success of its operating divisions.
Nintendo made $5.9 billion from its dedicated video game segment revenues, which includes sales of hardware and software, $124 million from smartphone games, and $7.5 million from playing cards and other content.
- Nintendo made more from hardware than it did from software
- Physical game sales are Nintendo's main bread and butter
- First-party game sales revenue (84%) eclipses third-party games (16%)
Another big stand out metric is software sales, which hit a record 85.41 million in Q3'22, more than any other third quarter or any quarter in Switch lifetime history. This shows a clear trend that although hardware is down slightly, users who own Switch consoles are buying more games at a faster pace than ever before.
To date, Nintendo has sold over 766 million games on the Switch.
Nintendo made $2.7 billion from software sales in Q3'22, a new record high to match the record unit sales.
Unlike Sony, Nintendo makes makes far more revenue from first-party games than it does third-party. The company made $2.2 billion from first-party game sales, representing 84% of total game software sales revenues, and $434 from third-party, or 16% of revenues.
Digital is an important part of Nintendo's revenues, but not nearly as important as it is for a company like Sony, who makes more from add-on content than it does from game sales on the PlayStation Network.
Out of the $2.7 billion earned from video games during Q3'22, most of that, or $1.76 billion (68%), was from physical. Digital generated $818 million during Q3'22 and represented 32% of total software sales.
Digital revenues include software sales, microtransactions, DLC and expansions, and revenues from subscriptions like Nintendo Switch Online.
Overall Switch hardware unit sales were down by nearly 1 million units in Q3'22. Holiday 2021 comes in third place for Switch shipments, with Q3'20 (10.82m) at #2, and Q3'21 at #1 with 11.57 million unit shipments.
Nintendo shipped 10.67 million Switch consoles through Q3'22, pushing total Switch console shipments to 103.54 million. The company warned investors that the chip shortage will make Switch production more costly and reduce overall profits-per-sale of each Switch system.
The sales breakdown looks like this:
- Switch - 5.34
- Switch Lite - 1.34
- Switch OLED - 3.99
Hardware generated nearly $3.2 billion in Q3, third to Q3'21 and Q3'20, driven by Switch sales. Nintendo made more money from hardware than it did from software during the period, which is typically the case (54% hardware, 46% software).
Nintendo Q3'22 sales metrics
- Net sales - $6.047 billion
- Operating profit - $2.19 billion
- Net profit - $1.7 billion
- Games revenues - $5.91 billion
- Digital revenue - $963 million
- Physical revenue -$1.764 billion
- Hardware unit sales - 10.6 million Switch consoles (-900,000 units)
- Hardware revenue - $3.188 billion
- Software revenue -$2.727 billion
- Software unit sales - 85.41 million Switch games (+9.56 million units)
Historical forex rates
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