There was a time not that long ago when things looked bad for Nintendo. When 3DS struggled at launch, Nintendo quickly slashed its price and found itself losing money for the first time ever in 2011. The next year, Wii U flopped, causing the company to suffer losses in 2012 and 2013 as well. The late great Satoru Iwata voluntarily reduced his salary, and many began calling for Nintendo to abandon hardware altogether. That all seems like ancient history now, as the astronomical success of Switch propels Nintendo to new heights. In fact, the company’s latest investor briefing reveals that 2020 was Nintendo’s most profitable year yet!
Nintendo’s most profitable year of all time
The newly released investor documents are full of updates on Nintendo’s software and hardware sales for the past fiscal year. That’s April 1, 2020, through March 31, 2021. During this period, Nintendo reported an astounding $16.59 billion in revenue, which is the highest total since the glory days of Wii and DS. That helped the company reach an operating profit of ¥640,634,000,000, or around $6 billion. That makes the fiscal 2020/2021 year Nintendo’s most profitable year of all time. This handy chart from Niko Partners Senior Analyst Daniel Ahmad helps to put this into context.
Digital sales rising
As you can see from the chart, Nintendo’s revenue and profits have been steadily climbing ever since Switch released. 2019 was a strong year, but 2020 absolutely crushed it. The company’s operating profit increased by 81.8% year over year. As Ahmad illustrated with another fantastic chart, digital sales were through the roof this year.
Digital sales were up 68.5% over last year (Nintendo’s previous best for digital sales) and accounted for 42.8% of total software revenue. The pandemic has been a huge driver of revenue for Nintendo, as people cooped up indoors last year treated themselves to video games to pass the time. Increases in subscriptions and DLC sales (as well as full game sales) drove digital sales to new heights.