'Zelda' sales breakout juices Nintendo's aging Switch

TOKYO, Aug 3 (Reuters) - Japan's Nintendo (7974.T) on Thursday said it sold 3.91 million units of its Switch console in the April-June quarter, exceeding sales in the same period a year earlier, boosted by the runaway success of its latest "Zelda" title.

Investor sentiment has been buoyed by the breakout success of the "The Super Mario Bros. Movie", which leads this year's global box office ranking, and praise for video game "The Legend of Zelda: Tears of the Kingdom" which went on sale in May.

Nintendo said it sold 18.51 million units of "Tears of the Kingdom" in the first quarter. The game has a score of 96 out of 100 on reviews aggregator Metacritic, indicating universal acclaim.

Sales in its business related to mobile and intellectual property tripled to 31.8 billion yen ($221.46 million) due to the success of the "Mario" movie, Nintendo said, which has also helped drive sales of games featuring the moustachioed plumber.

The results underscore Nintendo's success in extending the life of the aging Switch system, which has sold almost 130 million units, and using its roster of popular characters to boost revenue beyond the core gaming business.

The market is focused on the timing of a potential successor for the hybrid home-portable Switch, which has received incremental updates including a handheld-only version but is now in its seventh year on the market.

Attendees use a Nintendo Switch game console while playing a video game at the Paris Games Week (PGW), a trade fair for video games in Paris, France, October 29, 2019. REUTERS/Benoit Tessier

"I think they're going to ride out this fiscal year and squeeze the last bit of juice out of this system and then establish excitement for the new hardware sometime next year," said Serkan Toto, founder of the Kantan Games consultancy.

The Kyoto-based gaming firm maintained its full-year forecast for the console of 15 million units, which would be a 16.5% decline on a year earlier.

It "is not a goal that we will be able to achieve easily," Nintendo President Shuntaro Furukawa said in May.

First-quarter operating profit leapt 82% on a year earlier to 185.4 billion yen with sales of first-party software at record highs.

Unlike periods of thin games supply previously, Nintendo also has a robust pipeline of titles with "Detective Pikachu Returns" and "Super Mario Bros. Wonder" due for release later this year.

Nintendo's shares have delivered a more than three-fold return, including dividends, since the Switch went on sale in major markets in March 2017, outperforming the benchmark Nikkei's (.N225) 91% return over the same period.

($1 = 143.5900 yen)

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