Earnings Release: Nine Months Ended December 31, 2021 (860KB)

Nintendo Co., Ltd.

CONSOLIDATED FINANCIAL HIGHLIGHTS

February 3, 2022

					Nintendo Co., Ltd.
					11-1Hokotate-cho, Kamitoba,
					Minami-ku, Kyoto 601-8501
					Japan
					(Amounts below one million yen are rounded down)
Consolidated Results for the Nine Months Ended December 31, 2020 and 2021
(1) Consolidated operating results
	Net sales		Operating profit	Ordinary profit	Profit attributable
		to owners of parent
	million yen	%	million yen	%	million yen	%	million yen	%
Nine months ended December 31, 2021	1,320,219	(6.0)	472,551	(9.3)	513,794	(2.7)	367,387	(2.5)
Nine months ended December 31, 2020	1,404,463	37.3	521,108	98.2	528,230	92.9	376,665	91.8

[Notes]

Percentages for net sales, operating profit etc. show increase (decrease) from the previous fiscal year.

Comprehensive income: Nine months ended December 31, 2021: 385,895 million yen [(0.9%)] Nine months ended December 31, 2020: 389,573 million yen [100.7%]

		Profit per share		Diluted profit per share
					yen			yen
Nine months ended December 31, 2021		3,106.05				-
Nine months ended December 31, 2020		3,161.97				-
(2) Consolidated financial positions
		Total assets			Net assets	Capital adequacy
					ratio
			million yen			million yen			%
As of December 31, 2021			2,507,333				1,924,720		76.8
As of March 31, 2021			2,446,918				1,874,614		76.6
[Reference]
Shareholders equity : As of December 31 2021: 1,924,445 million yen As of March 31 2021: 1,874,371 million yen
Dividends
									Dividend per share
	End of 1st quarter		End of 2nd quarter	End of 3rd quarter	Year-end			Annual
			yen					yen		yen		yen	yen
Year ended March 31, 2021	-				810.00		-		1,410.00			2,220.00
Year ending March 31, 2022	-				620.00		-
Year ending March 31, 2022									-		1,080.00			1,700.00
(forecast)
[Notes]
Revisions to previously announced dividend forecast: Applicable
Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2022
	Net sales		Operating profit	Ordinary profit	Profit attributable	Profit per share
		to owners of parent
	million yen	%		million yen	%	million yen	%	million yen	%	yen
Year ending March 31, 2022	1,650,000	(6.2)		560,000	(12.6)	570,000	(16.1)	400,000	(16.7)	3,388.54

[Notes]

Percentages for net sales, operating profit etc. show increase (decrease) from the previous fiscal year. Revisions to previously announced financial forecast: Applicable

Please refer to "Notice of Full-Year Financial Forecast and Dividend Forecast Modifications" announced on February 3, 2022 for more details.

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Nintendo Co., Ltd.

Others

(1)	Changes for important subsidiaries during the nine-month period ended December 31, 2021	: Not applicable
(2)	Application of peculiar methods for accounting procedures	: Applicable
(3)	Changes in accounting procedures:
	1)	Related to accounting standard revisions etc.	: Applicable
	2)	Other changes	: Not applicable
	3)	Changes in accounting estimates	: Not applicable
	4)	Modified restatements	: Not applicable

1. Outstanding shares (common shares)
2. 1. Number of shares outstanding (including treasury shares)

	As of Dec. 31, 2021:	129,869,000	shares	As of Mar. 31, 2021:	131,669,000	shares
2)	Number of treasury shares
	As of Dec. 31, 2021:	12,546,769	shares	As of Mar. 31, 2021:	12,546,233	shares
3)	Average number of shares
	Nine months ended	118,281,429	shares	Nine months ended	119,123,454	shares
	Dec. 31, 2021:	Dec. 31, 2020:

[Notes]

1. This earnings release report is not subject to quarterly review procedures by a certified public accountant or audit firm.
2. Forecasts announced by the Company (Nintendo Co., Ltd.) referred to above were prepared based on management's assumptions with information available at this time and therefore involve known and unknown risks and uncertainties. Please note such risks and uncertainties may cause the actual results to be materially different from the forecasts (earnings forecast, dividend forecast, and other forecasts).

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Nintendo Co., Ltd.

1. Consolidated Operating Results

During the nine months ended December 31, 2021, in the Nintendo Switch business, Nintendo Switch - OLED Model launched in October and got off to a good start. Nintendo Switch and Nintendo Switch Lite also sustained sales momentum following the launch of Nintendo Switch - OLED Model, and all three models sold well while maintaining a good sales balance. Last fiscal year, the March 2020 release of Animal Crossing: New Horizons was a major driver of hardware sales, so compared to the same period of last year, the unit sales declined for hardware resulting in 18.95 million units (a decrease of 21.4% year-on-year). Looking at software, among titles released this fiscal year, Pokémon Brilliant Diamond and Pokémon Shining Pearl started out strong, with sales of 13.97 million units, Mario Party Superstars sold 5.43 million units, and The Legend of Zelda: Skyward Sword HD sold

1. million units respectively. Titles released in previous fiscal years also continued to sell well, with Mario Kart 8 Deluxe selling

1. million units (for cumulative sales of 43.35 million units) and Animal Crossing: New Horizons selling 4.99 million units (for cumulative sales of 37.62 million units). Sales of titles from other software publishers also continued to grow steadily, bringing the total number of million-seller titles during this period to 29, including titles from these other software publishers. Cumulative hardware sales have now grown beyond 100 million units, and as a result of continued good overall software sales that have leveraged this install base, software unit sales reached 179.29 million units (an increase of 1.8% year-on-year).
   Turning to our digital business for dedicated video game platforms, downloadable versions of packaged software for Nintendo Switch sold steadily, as did download-only software and Nintendo Switch Online memberships, and digital sales for this fiscal year totaled 255.0 billion yen (a decrease of 0.4% year-on-year).
   For the mobile business, many consumers continued to enjoy the released titles, and royalty income was stable, with the result that our mobile and IP related income totaled 39.8 billion yen (a decrease of 5.2% year-on-year).
   As a result, net sales reached 1,320.2 billion yen, with overseas sales of 1,043.0 billion yen accounting for 79.0% of the total. Operating profit came to 472.5 billion yen, ordinary profit was 513.7 billion yen, and profit attributable to owners of parent totaled

1. billion yen.

2. Consolidated Financial Forecast

For Nintendo Switch, we will continue to convey the appeal of the three models and work to further expand the install base. Regarding software, Pokémon Legends: Arceus was released in January, and we plan to follow that up with the release of Kirby and the Forgotten Land in March. There is also a robust variety of appealing titles from other software publishers scheduled for release, and we will work to strengthen sales through the combination of existing popular titles and a continuous stream of attractive new titles.

In regard to business risk, the extended impact of both COVID-19 and the global semiconductor shortage creates a state of continued uncertainty, with the possibility of future impact on production and shipping. While these and other unforeseen risks exist, we continue to take all necessary measures in conducting business.

We have revised the financial forecast published on November 4, 2021. For details, please see the Notice of Full-Year Financial Forecast and Dividend Forecast Modifications issued today (February 3, 2022).

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Nintendo Co., Ltd.

3. Other Information

(1) Application of peculiar methods for accounting procedures

(Calculation of tax expenses)

With respect to certain consolidated subsidiaries, corporate income tax amount is calculated by taking the amount of profit before income taxes through the nine-month period ended December 31, 2021 multiplied by reasonably estimated annual effective tax rate with the effects of deferred taxes reflected.

(2) Changes in accounting procedures related to accounting standard revisions, etc.

(Changes in accounting procedures)

(Application of the Accounting Standard for Revenue Recognition)

Effective at the beginning of the fiscal year ending March 31, 2022, Nintendo has adopted the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020). Under this standard, revenue is recognized at the amount expected to be received for the goods or services and at the time control of the promised goods or services is transferred to the customer.

Under the new standard, if the seller is obligated to buy back goods included in paid-for transactions, those goods are no longer recognized as extinguished when they are paid for. As a result, at the end of the third quarter of this consolidated accounting period, inventories and other current liabilities increased by 36,925 million yen. These were previously recognized as the extinguishment of paid-for services.

The application of the Accounting Standard for Revenue Recognition is subject to the transitional treatment stipulated in paragraph 84, but because there is no cumulative impact on profit or loss, the balance of retained earnings at the beginning of the period has not been adjusted. The impact on the quarterly consolidated financial statements is immaterial.

(Application of the Accounting Standard for Fair Value Measurement)

Effective at the beginning of the fiscal year ending March 31, 2022, Nintendo has adopted the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July 4, 2019). Requirements of this accounting standard will be applied prospectively, subject to the transitional treatment stipulated in paragraph 19 of the standard as well as Article 44-2 of the Accounting Standards for Financial Instruments (ASBJ Statement 10, July 4, 2019). There is no impact on the quarterly consolidated financial statements.

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		Nintendo Co., Ltd.
4. Consolidated Balance Sheets
		million yen
Description	As of March 31, 2021	As of December 31, 2021
(Assets)
Current assets
Cash and deposits	1,185,151	1,141,278
Notes and accounts receivable-trade	140,570	265,954
Securities	557,238	392,992
Inventories	86,817	169,256
Other	50,692	63,743
Allowance for doubtful accounts	(94)	(173)
Total current assets	2,020,375	2,033,051
Non-current assets
Property, plant and equipment	83,569	84,187
Intangible assets	14,922	16,172
Investments and other assets
Investment securities	214,832	260,675
Other	113,219	113,246
Total investments and other assets	328,051	373,921
Total non-current assets	426,543	474,281
Total assets	2,446,918	2,507,333
(Liabilities)
Current liabilities
Notes and accounts payable-trade	114,677	184,158
Provisions	5,227	2,105
Income taxes payable	157,307	43,380
Other	249,119	303,143
Total current liabilities	526,331	532,787
Non-current liabilities
Retirement benefit liability	21,001	22,448
Other	24,970	27,377
Total non-current liabilities	45,972	49,825
Total liabilities	572,304	582,613
(Net assets)
Shareholders' equity
Share capital	10,065	10,065
Capital surplus	15,043	15,041
Retained earnings	1,993,325	2,088,402
Treasury shares	(156,851)	(220,329)
Total shareholders' equity	1,861,582	1,893,180
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	33,571	32,349
Foreign currency translation adjustment	(20,782)	(1,084)
Total accumulated other comprehensive income
12,788	31,265
Non-controlling interests	243	274
Total net assets	1,874,614	1,924,720
Total liabilities and net assets	2,446,918	2,507,333

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