Nintendo’s performance in the third quarter of FY22 nearly matches last year’s record holiday period.
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Nintendo recently announced its third quarter results for the 2021 holiday season, and the results are stellar. Nintendo set new milestones for earnings and software sales, and overall net sales neared pandemic highs of 2020. In this article, we’ll use USD conversions based on Nintendo’s historical exchange rates. provided in its documents and its investor information notices. All given values are rounded.
Let’s first look at net sales, which were about $6.047 billion (695.946 billion yen). Overall net sales generated strong results and represent the second highest point in Nintendo’s history, driven by the full conjunction of all of Nintendo’s operating businesses: games hardware, software, digital services and subscriptions, mobile games and playing cards/accessories.
Operating profit, which is profit after operating expenses, was $2.19 billion (252.592 billion yen). This is another metric that comes only after 2020’s record highs. Strong operating profit was driven by a rush in digital software sales, first-party game sales and hardware sales. .
Total profits, or profits after income taxes and all expenses, hit a record $1.7 billion. Nintendo made more profit in Q3’22 than in any other Q3 period in Switch history, thanks to the success of its operating divisions.
Nintendo made $5.9 billion from revenue from its dedicated video game segment, which includes hardware and software sales, $124 million from smartphone games, and $7.5 million from playing cards and other content.
- Nintendo made more hardware than software
- Physical game sales are Nintendo’s main bread and butter
- Revenue from first-party game sales (84%) eclipses third-party games (16%)
Another important metric is software sales, which hit a record 85.41 million in Q3 22, more than any other Q3 or quarter in Switch history. This shows a clear trend that although hardware is down slightly, users who own Switch consoles are buying more games at a faster rate than ever before.
To date, Nintendo has sold over 766 million games on Switch.
Nintendo earned $2.7 billion from software sales in Q3’22, a new record to match record unit sales.
Unlike Sony, Nintendo generates much more revenue from first-party games than from third-party games. The company earned $2.2 billion from first-party game sales, representing 84% of total game software sales revenue, and $434 from third parties, or 16% of revenue.
Digital is a big part of Nintendo’s revenue, but not as big as it is for a company like Sony, which derives more from extra content than game sales on the PlayStation Network.
Of the $2.7 billion earned from video games during Q3 22, the bulk, $1.76 billion (68%), came from physical. Digital generated $818 million in Q3’22 and accounted for 32% of total software sales.
Digital revenue includes software sales, microtransactions, downloadable content and add-ons, as well as revenue from subscriptions like Nintendo Switch Online.
Overall Switch hardware unit sales were down nearly 1 million units in Q3’22. Holiday 2021 comes in third place for Switch shipments, with Q3’20 (10.82 million) at No. 2 and Q3’21 at No. 1 with 11.57 million unit shipments.
Nintendo shipped 10.67 million Switch consoles in the third quarter of 2022, bringing total Switch console shipments to 103.54 million. The company warned investors that the chip shortages will make Switch production more expensive and reduce the overall profit per sale of each Switch system.
The sales breakdown looks like this:
- Switch – 5.34
- Switch Lite – 1.34
- OLED switch – 3.99
The hardware generated nearly $3.2 billion in the third quarter, third after the third quarter of 2021 and the third quarter of 2020, thanks to Switch sales. Nintendo made more money from hardware than software over the period, which is generally the case (54% hardware, 46% software).
Nintendo Q3’22 Sales Statistics
- Net sales – $6.047 billion
- Operating income – $2.19 billion
- Net profit – $1.7 billion
- Gaming revenue – $5.91 billion
- Digital revenue – $963 million
- Physical income –$1.764 billion
- Unit sales of equipment – 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)