Nintendo invests up to $ 900 million to expand game development
Nintendo makes a lot of money from all Switch console sales, and the company plans to spend a significant portion of its profits on expanding gaming software development. The second quarter financial results briefing for the year ending March 2022 provides us with additional details under Nintendo’s “Cash Utilization” segment.
Here’s what Nintendo had to say about its current cash position: “The Nintendo Switch business has exceeded our expectations, putting us in a strong cash position in recent years and providing a good opportunity to reconsider how to use the most. effectively our cash flow in a variety of strategic and meaningful ways.
The first main objective of using cash is the creation of software assets. Nintendo plans to invest up to 100 billion yen (about $ 880 million) to “expand the game software development frameworks within the Nintendo Group.” Since Nintendo has yet to start production of its next-gen console, we’ll see the impact of the investment starting with Switch games. An additional 50 billion yen (~ $ 440 million) will be spent on non-game entertainment, specifically “business opportunities that have an affinity with the games industry”, such as feature films.
The second goal is to create a foundation for maintaining and expanding consumer relationships, centered around Nintendo Accounts. Nintendo plans to invest 300 billion yen (approximately $ 2.6 billion) to expand how Nintendo Accounts can serve as a “foundation for providing consumers with better experiences and services and creating new added value.” This is a crucial point given the negative feedback on the Nintendo Switch Online + Expansion Pack. A large portion of the funds will be used to improve the My Nintendo service and the My Nintendo store.
To sum up, Nintendo will further strengthen its strengths in software development while putting more resources to work on what could be seen as its network and infrastructure weaknesses.