Nintendo Boosts Forecast 50% As "Stay At Home" Video Gaming Demand Skyrockets

While most “stay at home” stock focus during the pandemic has been on names like Zoom, Slack and Pelton, it seems the video game industry has snuck past many “mainstream” analysts’ radar.

But that doesn’t necessarily mean that these stocks aren’t worth paying attention to. In fact, well-known financially conservative video game company Nintendo spiked on Thursday after it raised its forecasts midway through its fiscal year.

Shares were already up more than 30% this year, before finishing the day up another 6% on the announcement. The company’s announcement is a sign of “robust gaming demand from consumers stuck at home during the pandemic,” according to Bloomberg.

Nintendo raised its operating profit to $4.3 billion (450 billion yen), up from $2.15 billion (225 billion yen) and boosted its revenue forecast from 1.4 trillion yen to 1.2 trillion yen. It also raised guidance on Switch consoles sold, up to 24 million units from 19 million units.

The company reported an operating profit of 146.7 billion yen for the September quarter, beating estimates of 96.2 billion yen. It also thrashed top line expectations, reporting 411 billion yen in revenue compared to estimates of 321.4 billion yen.

Amir Anvarzadeh, a market strategist at Asymmetric Advisors in Singapore, said: “So another blow-out quarter. These are type of (operating profit) levels we tend to see in the current holiday quarters. So we will have 3 Xmas quarters in one term.”

Nintendo President Shuntaro Furukawa said: “The Switch hardware momentum remains strong, and we think that’s because production has recovered so customers who were previously unable to find a Switch on store shelves are now able to.”“The Switch production situation has now completely recovered and we have no issues with that,” Furukawa continued.

The company had been previously dealing with a Switch shortage due to the popularity of the game Animal Crossing. The game has become a popular online forum for gamers to burn time while stuck at home during the pandemic. The Switch bottleneck has been dealt with now, according to the company. The game sold 3.64 million copies in the September quarter alone.

Bloomberg

The number also assured Nintendo that the Switch can be competition to new console products from Sony and Microsoft during the holiday season.

Analyst Mat Piscatella said:

Nintendo has done exceptionally well in recent months, driven partially because there has been relatively steady flow of hardware stock. Nintendo did an amazing job boosting its supply chain and getting more hardware out there quickly.

Looking forward, the picture remains optimistic. Bloomberg Intelligence analyst Matthew Kanterman concluded:

Nintendo’s switch software sales in 2Q were quite impressive and yet the guidance still appears quite conservative there. Guidance implies switch software units down 37% in 2H which is clearly just too low.

Source: Zero Hedge

Image: Pixabay

Become a Patron!

Subscribe to Activist Post for truth, peace, and freedom news. Send resources to the front lines of peace and freedom HERE! Follow us on SoMee, HIVE, Parler, Flote, Minds, and Twitter.

Provide, Protect and Profit from what’s coming! Get a free issue of Counter Markets today.