Nintendo President Shuntaro Furukawa has revealed during a recent conference call that indie games and DLC add-ons have done very well on the Nintendo Switch, especially outside of Japan. This is a factor in Nintendo’s marquee console’s success. The Nintendo eShop has been a major factor in the success of Nintendo’s software, so this is no surprise. There are so many quality independent games for the system, and the DLC add-ons, such as the ones for Pokemon Sword and Shield and Super Smash Bros. Ultimate, are superb. Furukawa had this to say about it.
Question 3: On page 14 of the Financial Results Explanatory Materials, with the chart for digital sales trends, you show a significant increase in sales in the third quarter for what is grouped as “Download only software, add-on content, and Nintendo Switch Online, etc.” Can you give some background on this increase? Also, what can you say about the outlook for next fiscal year and beyond?
Answer 3 Furukawa: The increase in sales for download-only software, add-on content, and Nintendo Switch Online resulted not from any large jump in a specific area, but rather from growth across all three, compared to the previous fiscal year. Regarding download-only software, sales were especially strong for indie titles in overseas markets. As for the increase in sales of add-on content, major contributions came from the second round of add-on content for Pokémon Sword Expansion Pass and Pokémon Shield Expansion Pass, which was released in the third quarter, and from Fighter Pass Vol. 2 for Super Smash Bros. Ultimate. Nintendo Switch Online sales increased thanks in part to the growth in membership that has accompanied the rise in hardware sales. Looking at next fiscal year and beyond, it is our view for this category that sales volumes and sales ratios will increase or decrease depending on content and the timing of releases, rather than that they will continue at their current level. That said, the continuous growth of digital sales in general is not limited to these factors. Consumers who have bought digital products and experienced their convenience tend to prefer to continue to make digital purchases, so we see digital sales continuing to trend upward over the mid-to-long term.
Independent games have found a home on the Nintendo Switch, and the latest add-ons for the system have been phenomenal. If this is anything to go on, the Switch will have even more in store for us in the future.