Nintendo second-quarter profit hits eight-year high, powered by Switch sales

OSAKA (Reuters) - Japan's Nintendo Co Ltd 7974.T on Tuesday said sales of Switch consoles and games pushed operating profit up 30 percent in the July-September period to reach its highest quarterly result in eight years.

The Nintendo booth is shown at the E3 2017 Electronic Entertainment Expo in Los Angeles, California, U.S. June 13, 2017. REUTERS/ Mike Blake

Second-quarter profit hit 30.9 billion yen ($274.11 million), the Kyoto-based gaming company said, though that undershot analyst estimates.

Nintendo also said it sold 5.07 million of its Switch consoles over April-September, and maintained its sales forecast for the year ending March at 20 million consoles.

President Shuntaro Furukawa, who assumed the role in June, said the sales target was a challenge but expressed confidence it would be reached.

Nintendo’s earnings were supported by the 42 million Switch games sold in April-September, versus 22 million in the same period a year earlier, with upcoming titles generating a buzz among games fans including next month’s Pokemon: Let’s Go titles and December’s Super Smash Bros. Ultimate.

The firm is also working to turn mobile gaming into an additional revenue stream, releasing its latest title, Dragalia Lost, last month. Within weeks, the president of co-developer CyberAgent Inc 4751.T hailed the game as its "number one hit" over that time frame. CyberAgent's previous hits include Granblue Fantasy.

The partnership is the latest by the secretive games maker, whose mobile titles such as Mario Run and Animal Crossing: Pocket Camp have not been as successful as the augmented-reality monster catching game Pokemon Go from partner Niantic Inc.

Nintendo has also been slow in offering online services for the Switch - which potentially offers a predictable revenue stream from a subscriber base - with Nintendo Switch Online launching last month.

Furukawa, who at 46-years-old is young by Japanese corporate standards, said the service had got off to a good start but declined to provide financial details.

Nintendo's shares hit a 10-year high in January but have since fallen around 30 percent amid broader weakness in technology-related stocks. They closed up 1.7 percent on Tuesday ahead of the earnings release, broadly in line with the benchmark share price index .N225.

($1 = 112.7300 yen)

Reporting by Sam Nussey; Editing by Christopher Cushing