Nintendo Profit Plunges 46 Percent Despite Higher Switch Sales

Nintendo Switch - Getty - H 2018
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The Japanese game maker took a $110 million hit due to foreign exchange losses.

Nintendo on Tuesday posted a quarterly profit drop of 46 percent to $152 million (16.6 billion yen) despite a 2.4 percent revenue increase to $1.58 billion (172 billion yen).

Although revenue from sales of its Switch console climbed from $1.19 billion (130 billion yen) in the April-to-June quarter of 2018 to $1.4 billion (153 billion yen) this year, the Kyoto-based company suffered a $110 million (12 billion yen) hit to its profits due to exchange rate fluctuations.

Operating profit, widely regarded as a better measure of the health of the underlying business, fell just over 10 percent to $253 million (27.4 billion yen).

Rival Sony also saw forex losses hit profitability in some of its major divisions in its quarterly results, released Tuesday.

Nintendo sold 2.13 million Switch consoles worldwide in the quarter, up 13 percent from 1.88 million in the same period last year, giving it a lifetime total of almost 37 million.

The company is forecasting sales of 18 million Switch consoles for the year through March 2020, though it has a track record of optimistic predictions.

Software sales were up from just under 18 million games in the first fiscal quarter of 2018 to more than 22.6 million this year, helped by titles including Super Mario Maker 2 and Mario Kart 8 Deluxe. The value of digital software sales in the quarter jumped more than 65 percent to $282 million (30.6 billion yen).

Income from mobile IP climbed 10 percent to $92 million (10 billion yen) for the quarter.

In September, Nintendo will release a hand-held Switch Lite console, priced at $199.