Nintendo upgraded its full-year net profit forecast on Thursday despite a weaker performance in the first half as the coronavirus lockdown-fuelled global gaming boom slowed.
The Japanese gaming giant now projects net profit at 350 billion yen ($3.1 billion) for the year to March 2022, up from an earlier estimate of 340 billion yen.
It also hiked its software sales forecast for this fiscal year ahead of releases including three titles in the popular Pokemon franchise.
The Kyoto-based firm's more optimistic outlook follows the October release of an upgraded model of its Switch console.
However, Nintendo lowered its annual target for Switch sales as Japanese media reported that production would be hit by the global chip shortage.
For the six months to September, Nintendo's net profit dropped 19.4 percent to 171.8 billion yen -- still well up from 62 billion yen in April-September 2019.
The extraordinary demand experienced by gaming hardware makers during pandemic lockdowns is slowing as life returns to normal in many countries.
Nintendo had posted its highest ever annual profit in 2020-21, boosted by the runaway popularity of the Switch console and the family-friendly game "Animal Crossing".
It lowered its annual Switch sales target to 24 million units for the current fiscal year from the 25.5 million forecast earlier.
The Nikkei business daily this week reported that annual Switch production was expected to fall by some 20 percent from its target for the current fiscal year due to the chip crunch.