Nintendo is making plenty of bank from all the Switch console sales, and the company plans to spend a hefty amount of its profits into expanding game software development. The second-quarter financial results briefing for the fiscal year ending March 2022 provides us with additional details under Nintendo’s “Cash Utilization” segment.”
Here’s what Nintendo had to say about its current cash position: “The Nintendo Switch business has exceeded our expectations, putting us in a strong cash position in these last few years and presenting a good opportunity to reconsider how to most effectively utilize our cash in a variety of strategic and meaningful ways.”
The first main focus of cash utilization is building software assets. Nintendo plans to invest up to 100 billion yen (~$880 million) to “expand game software development frameworks inside the Nintendo group.” Considering that Nintendo has yet to begin production on its next-generation console, we’ll see the impact of the investment starting with Switch games. An additional 50 billion yen (~$440 million) will go into non-gaming entertainment, more specifically, “business opportunities that have an affinity with the game business,” such as feature films.
The second focus is on building a foundation for maintaining and expanding relations with consumers, centered on Nintendo Accounts. Nintendo plans to put in a whopping 300 billion yen (~$2.6 billion) to expand how Nintendo Accounts can serve as the “foundation for providing consumers with better experiences and better services and creating new added value.” This is a crucial point given the negative feedback on the Nintendo Switch Online + Expansion Pack. A lot of the funds will go into efforts to enhance the My Nintendo service and the My Nintendo Store.
To summarize, Nintendo will further strengthen its strengths in software development while putting more resources into working on what could be seen as its weaknesses in networking and infrastructures.