Nintendo's (OTC:NTDOY) latest gaming console, the Switch, first debuted in 2017. With the pace of technology, it would seem that a four-year-old console would be on its last legs, but that's not the case at all. On a Fool Live episode recorded on May 12, Fool contributors Toby Bordelon and Brian Withers discuss the tremendous success it had with its console platform this past year and what investors should be thinking about going forward with this gaming platform company.
Toby Bordelon: Nintendo had a great quarter, too. Well, this is actually their fiscal year. They're on a not a calendar year basis and this last quarter was the end of their fiscal year. Switch sales, their new handheld gaming console, up 37%, and that translates to 29 million units sold versus 21 last year. Game sales also up 37%. If you've been paying attention to the gaming market during the pandemic, Animal Crossing leading the way. No surprise there.
Revenue up 35%, operating profit, they report in yen, but it translates to about $4.4 billion. Great, they had a strong, solid quarter. My issue, what I alluded to back on the question to Brian was you got Switch sales, we got game sales, things that really work when you're holed up in your house and can't go anywhere. Does this continue post-pandemic? That's my wildcard for them. I don't know. We're going to have to see that. I think a lot of this is pandemic-driven increases, but it's still a very popular device so we could still see some legs here.
Brian Withers: Yeah, we're a Nintendo household too, Toby. The question is another fill-in-the-blank. The most exciting product from Nintendo is blank.
Bordelon: Let's say based on what we've seen this past couple years, got to be the Switch. That has been driving their growth. You couldn't find it. If you try to get one on Amazon on eBay, you were paying double, triple the price. Their problem was not making enough fast enough to sell. That's definitely the one.
Now interestingly, we've got rumors of a higher-end version coming later this year. That could help Nintendo compete against Microsoft and Sony who have recently announced new consoles themselves. Different ballpark, different market really. But they could hold their own with a higher-end Switch, especially if we're seeing supply chain issues on Microsoft and Sony, too. That's a theme with all these companies in manufacturing. But yeah, look for that new version. If they launch that this year, maybe the party keeps going a little bit longer. We'll see.
Withers: Both of my kids have a Switch. It's a huge leap forward from their last console for sure.