Nintendo has set a new record in first-quarter profit as sales for its Nintendo Switch console were boosted following the smash-hit launch of its Legend of Zelda sequel.

The news comes after a previous decline across the board for the video game giant in the financial year ending March 31 2023. 

The Japanese company reported sales of JPY 461.34bn ($3.18bn). Nintendo’s financial results also saw the company bring in $1.3bn operating profit, which beat its last record quarterly high set back in 2020. 

Nintendo’s record profit was undoubtedly boosted by the release of its long-awaited sequel The Legend of Zelda: Tears of the Kingdom, which released in May to a flurry of positive reviews.

In just three days the game sold a whopping 10 million copies, now totalling over 18.5 million, according to the company. 

It is unclear what Nintendo is planning to keep the new momentum going, as the Japanese video game giant has no upcoming major releases on the level of Zelda for the rest of the year. Shuntaro Furukawa, Nintendo President, previously claimed the maintaining the momentum of the seven year old Nintendo Switch is a difficult task.

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By GlobalData

“Sustaining the Switch’s sales momentum will be difficult in its seventh year. Our goal of selling 15 million unit this fiscal year is a bit of stretch, but we will do our best to bolster demand going into the holiday season so that we can achieve the goal,” Furukawa said in May.

Meanwhile, Sony’s hugely popular Playstation 5 console has several major game releases due to release before the year ends.

Sony celebrated its record-breaking earnings for its Playstation in fiscal year 2022, generating nearly $27bn in total revenues for the period.

Nintendo’s healthy financial reports follow a tough year for gaming last year, as the value of deals made in the industry plummeted.

According to research firm GlobalData, the total value capital raising gaming deals made in 2022 totalled $23.4bn, as the world manoeuvred itself out of the coronavirus pandemic.

This is substantially lower than 2021, which saw a record peak total of $48.8bn.

The gaming industry will be worth a massive $470bn in less than a decade, increasing by more than double from its 2021 $197bn valuation, GlobalData predicts.

GlobalData says that cloud gaming will fundamentally change the video games industry over the next 10 years, to the same extent that video and audio streaming has reshaped the music, film, and TV industries.

Worth $1bn in 2020, the global cloud gaming market will grow to become a
$30bn industry by 2030, at a compound annual growth rate (CAGR) of 40% over
this 10-year period, according to GlobalData estimates.

This, however, is in its very early stages - as cloud gaming accounted to less than 1% of revenue in the video games industry in 2020.