This is the first time in more than a decade that publisher Nintendo has reported its quarterly financial results without its president Satoru Iwata. The gaming company chief died earlier this month, but he left the Mario maker in strong position.
Nintendo’s share price has surged up 5.6 percent to around $22.23 on over-the-counter markets. This comes as the publisher reported a profit (operating income) of $9.3 million, which smashed analyst expectations. Wall Street was anticipating that the company would report a lost of around $1 million. Nintendo owes its Q1 success to a few factors, but the majority of the credit should go to Iwata — who struggled to return the publisher back into a consistently profitable business.
This comes more than a year after Nintendo’s financials were looking their grimmest. In May 2014, the company reported a loss of $229 million for its fiscal year. This was due to a Wii U that failed to generate excitement among gamers in the face of competition from Sony and Microsoft’s hot new systems. An aging 3DS platform also pulled down the company’s performance as well.
Following that huge loss, Iwata made a promise to investors that he would guide Nintendo back to profitability by the next fiscal year. And he delivered on that. In May of this year, Nintendo generated a profit of $150 million.
But even with that impressive turnaround, analysts were not expecting Nintendo to keep its winning streak alive. But Iwata, who decided to embrace mobile gaming and will release its first smartphone apps later this year, has already found a way for the company to surpass its goals.
And the biggest factors leading to Nintendo’s Q1 profit were varied and show that the company is still full of surprises.
One of the more predicable successes for Nintendo was its latest 3DS redesign. That has reinvigorated sales for that handheld.
“During the three months ended June 30 for Nintendo 3DS, New Nintendo 3DS and New Nintendo 3DS XL, which were
launched during the previous fiscal year as the newest members of the Nintendo 3DS family, continued to expand their sales,” reads the company’s financial report. “The global sales of the Nintendo 3DS hardware reached 1.01 million units [during Q1].”
Next, the company’s Amiibo interactive gaming toys have started to turn into an extremely predictable source of revenue. The company specifically credits these plastic figures with pushing its revenues to over $728 million.
Finally, in the surprise category, Nintendo owes a lot of its Q1 results to its latest smash hit franchise Splatoon. The Wii U ink shooter has caught on in a big way with fans, and that led to sales of over 1.62 million units worldwide during the last quarter.
“[Splatoon] contributed to vitalizing the Wii U platform,” reads Nintendo’s report. “The worldwide sales of the Wii U hardware and software were 0.47 million and 4.55 million units last quarter, respectively.”
That means that Splatoon made up more than 35 percent of every Wii U game sold from April through June despite only coming out in May.
Looking at Splatoon, Amiibo, and 3DS, the big point here is that Nintendo is looking like a really healthy company. It’s still not competing with Xbox One and PlayStation 4, but it’s turning a profit. This is something that Nintendo has always figured out how to do even while its Nintendo 64 and GameCube systems didn’t quite live up to their competition. Now, following the mammoth “blue ocean” success of the Wii, Iwata found a way to stabilize his company before preparing it for the next phase of making games for Android and iOS.