Nintendo trumped analyst expectations in its first quarter to report an 88 per cent growth in operating profit, despite sales of its Switch console turning sluggish.
The profit was boosted by sales of games for the Switch, as returning customers buy up titles to refresh the console rather than hosting an influx of new users.
Nintendo's results, the first to be released under its new president Shuntaro Furukawa, highlighted operaitng profit of ¥30.5bn (£207.4m). Analysts had forecasted an operating profit for the April to June quarter at ¥22bn, according to polling data from Thomson Reuters.
The Japanese gaming giant sold 1.88m Switch consoles in the quarter, coming in slightly under analyst expectations from Deutsche Bank of 2.5m. Despite this, Nintendo maintained its guidance to sell 20m consoles throughout the full fiscal year to next March.
Fears of poor sales for the Switch have dragged Nintendo's share price down as of late, falling 20 per cent in the last three months. As markets closed in Asia this morning, its shares were down 2.06 per cent.
The top games for the quarter included Donkey Kong Country: Tropical Freeze, which released in May and has sold 1.4m units worldwide so far. The company said Mario Tennis Aces, released in June, is also off to a good start with 1.38m units sold.
Analysts are predicting an uptick as the year goes on, in anticipation of a bumper holiday season and the release of three new Pokemon games in November.
The third Nintendo Labo toy-con product will be released in September, followed closely by the next installment in the popular Super Mario Party franchise. Nintendo Switch Online, an online multiplayer functionality that has been fruitful for many companies in the gaming industry, is also slated to go live at a similar time.