Nintendo Wants to Again Catch Smartphone Game Lightning

Nintendo re-energized its brand relevance in 2017 with the launch of Switch, the seventh major game console developed by the venerable Japanese manufacturer.

Now, incoming CEO Shuntaro Furukawa wants to recapture the Pokémon Go smartphone game craze of 2016 (co-created with Niantic) with a new platform of smartphone apps. Pokémon Go generated $950 million in revenue, of which Nintendo got a 19% cut of total revenue.

“From what I can see, smartphone games are the ones I want to expand the most,” Furukawa told Nikkei Asian Review.

While Furukawa may be swinging for the digital fences, Nintendo concluded fiscal year 2018 (ended March 31) with a physical media grand slam thanks to Switch and related legacy software.

The company reported $9.1 billion in revenue, more than double the $4.5 billion in fiscal 2017. Profit ballooned 36% to $1.3 billion from $940 million.

Hardware sales (thanks to Switch) represented 65.4% of revenue compared to 54% of revenue in 2017. Software represented 85% of sales compared to 87% last year.

More importantly, digital revenue, which included downloadable versions of packaged software, download-only software and add-on content, generated $557 million, or 17% of sales, compared to $298 million (15%) in 2017.

“The idea that something will emerge [in mobile] that transforms into something big, in the same manner as game consoles, is the defining motive of the Nintendo business,” said Furukawa.

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