As the world deals with the coronavirus pandemic, Nintendo released its most recent financial statement. In it, the Kyoto-based game maker discussed how the virus has impacted the company as well as possible forecasts for the future.
According to Nintendo, covid-19 caused delays in production and shipments of the Switch, Ring Fit Adventure, Joy-Cons and other accessories during February and March. However, this had “limited impact” on business results, Nintendo added, with hardware and software sales exceeding last year’s numbers by healthy margins. Hardware sales are up 24 per cent year on year, while software sales have increased 42.3 per cent.
Moving forward, Nintendo discussed how covid-19's spread could impact the company. Nintendo noted that production and shipping delays are improving, but there could be further supply chain issues. There are other concerns, such as how lockdowns might impact selling games and hardware through retail stores, and concerns over a general global decline in consumption.
The pandemic could also impact game development in Japan and outside the country. “If the effects of COVID-19 are prolonged or worsen further, development schedules may be impacted due to the difference in development environments between working from home and in the office,” writes Nintendo in its most recent consolidated financial statement.
“In particular, the impact to overseas subsidiaries and other affiliated companies involved in development is anticipated to be even more difficult to predict than within Japan. As a result of these factors, we may not be able to proceed with the release of Nintendo products and the start of services as planned. This is also true for other software publishers, so it may not be possible to provide game content on Nintendo platforms as planned.”
This is a real concern. In a March issue of Famitsu, Smash Brothers creator Masahiro Sakurai discussed how coronavirus covid-19 was complicating the game development process.
Nintendo also expressed concern over the possibility that its online network might be impacted by the pandemic, writing, “...there is a possibility that provision of those services offered via our network may be suspended in the event that we are no longer able to maintain the stability of our network systems.”
In a footnote, Nintendo stated that these are projections made now with currently available information. They are, obviously, subject to change. The company does seem optimistic, yet cautious.
“Regarding the impact of covid-19 on our earnings forecasts, production and sales volumes may decrease for a certain period of time, but we anticipate that production and sales will be able to meet demand for the full year and that we will be able to release software titles now in development as planned. That being said, there are many elements of uncertainty, so if there is a need to revise our earnings forecasts at a later date, we will promptly disclose those revisions.”