(Bloomberg) -- Nintendo Co.’s earnings beat estimates after hit games like Monster Hunter Rise propped up sales of the Switch, but the company warned that global chip shortages may disrupt production of its marquee device.It forecast 500 billion yen in operating profit this year, although Nintendo, like many Japanese companies, often begins the fiscal year with a conservative outlook so it has room to raise the figure later. The company is targeting sales of 25.5 million consoles in the current year ending March 2022. Internally, Nintendo’s management is shooting for production of between 28 and 29 million consoles, according to people familiar with the projections who asked not to be named disclosing company targets.Nintendo’s better-than-expected results suggest the Covid-era boom in gaming that turned Animal Crossing: New Horizons into a global online town hall has legs. The Kyoto-based studio reported operating income of 119.5 billion yen ($1.1 billion) for the March quarter, trouncing the average forecast of 68.3 billion yen. The company sold 28.8 million Switch units in the fiscal year ended March, surpassing the 26.5 million it projected.President Shuntaro Furukawa told reporters on Thursday that Nintendo wasn’t able to produce as many Switch devices as it had hoped due to component shortages. Recent demand has been higher than the company anticipated and the console hasn’t yet reached its peak, he added. Nintendo’s goal is now to surpass its official target of selling 190 million software units this year.The handheld-hybrid Switch maintained momentum in the face of newer gaming machines from Sony Group Corp. and Microsoft Corp., both of which have also suffered from chip shortages limiting production. Buoyed through most of 2020 by Animal Crossing’s runaway success, Nintendo’s signature device rode blockbuster titles including Capcom Co.’s latest Monster Hunter installment and Konami Holdings Corp.’s Momotaro Dentetsu during the most recent quarter.Nintendo’s own product lineup has been relatively quiet in recent months. Bloomberg News has reported that the company plans a big rollout of new titles alongside an upgraded version of the aging Switch -- with a faster Nvidia chip and a Samsung OLED display -- in the latter half of the year. The original console is now more than four years old and was joined by a more affordable Switch Lite variant in late 2019.What Bloomberg Intelligence SaysNintendo needs to drive software sales, live services and mobile games to support earnings growth beyond this fiscal year ending March, in our view, as the Switch platform enters the mature phase of its cycle. Switch hardware sales may peak in 2020 absent a reported but as yet unconfirmed Pro version, putting greater onus on software to drive profit.- Matthew Kanterman and Nathan Naidu, analystsClick here for the research.Read more: Nintendo Is Said to Target Record Year in Switch, Game SalesThe coronavirus outbreak was at first a brake and then an accelerant for Nintendo, choking its supply chain before triggering a demand surge with global lockdowns driving people to seek entertainment and escape. The company’s hardware sales improved by 37% and its software sales also rose 37% to 231 million units over the past fiscal year. It increased its proportion of sales coming from digital downloads to 43% from the previous 34%.Nintendo’s shares closed 1.7% lower Thursday before the results, taking losses this year to 6.4%.(Updates with comments from Nintendo president in fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Microsoft Corp will allow commercial and public sector customers in the European Union to process and store all of their data in the region, a growing demand from some clients. The company will complete the implementation of all engineering work needed to execute the plan by the end of next year and it will apply to all its core cloud services – Azure, Microsoft 365, and Dynamics 365, the company said on Thursday. Microsoft will consult with customers and regulators about this plan in the coming months, including adjustments that are needed in unique circumstances like cybersecurity, its President Brad Smith said in a statement https://blogs.microsoft.com/eupolicy/2021/05/06/eu-data-boundary.
(Bloomberg) -- Epic Games Inc.’s first chance to put Apple Inc. on the defensive about its App Store at a high-stakes trial got off to a rocky start.Epic’s lawyers opened their questioning of App Store chief Matt Fischer by dredging up a five-year-old email that quoted a colleague saying “Matt feels extremely strong about not featuring our competitors on the App Store.” But the quote wasn’t presented in its full context and Fischer quickly dismissed it as a misrepresentation.Then the game maker was excoriated by the judge for blindsiding her about a cache of evidence exhibits that the company released publicly.Fischer is the first Apple employee to take the witness stand as Epic, the creator of Fortnite, tries to prove that the marketplace for apps that run on hundreds of millions of iPhones is operated like a monopoly. Trystan Kosmynka, a senior director at Apple in charge of the app review process, is set to be called to the stand later in the day.The trial in Oakland, California, comes as Apple faces a backlash -- with billions of dollars in revenue on the line -- from global regulators and some app developers who say its standard App Store fee of 30% and others policies are unjust and self-serving.How Apple’s App Store Sparked an Epic Trial: QuickTakeThe fight with Epic blew up in August when the game maker told customers it would replace Apple’s in-app purchase system with its own, circumventing Apple’s commissions from add-ons inside of Fortnite. Apple then removed the game, cutting off access for more than a billion customers.Apple, which vehemently denies abusing its market power, has called Epic’s legal gambit a “fundamental assault” on a business model that is beneficial to both developers and consumers.The statement that Fischer’s colleague made about him in a 2016 email was in relation to featuring Google and Amazon in Apple’s App Store page for accessible apps. The subject of the email was: “Competitor Apps in VoiceOver Collection.” The full sentence from which Epic pulled the quote was: “Although they may be our best and brightest apps, Matt feels extremely strong about not featuring our competitors on the App Store, so Tanya asked us to apply the same filters for this collection.”When Apple’s attorney asked Fischer to clarify the email, he said his colleague was misinformed.“We have promoted apps that are competitive to Apple apps,” Fischer testified. “We do this all the time.” Disney Plus and Hulu are examples of apps Apple has promoted despite having Apple TV+ service, Fischer said.Apple’s lawyer also neutralized Epic’s attempt to pin certain security and privacy problems on Fischer by pointing out that they weren’t part of his duties managing the App Store.Epic also managed to get cross-ways with U.S. District Judge Yvonne Gonzalez Rogers for putting documents online for public viewing without giving her an explanation.“All these things are being published, they’re out there,” Gonzalez Rogers said. “Non lawyers don’t understand the difference between something being admitted for the truth versus being admitted for some other purpose like notice so I want to nail that down.”Some of the documents that were uploaded to a publicly accessible account account disappeared shortly after the judge’s remarks.The courtroom has limited public seating due to pandemic-related restrictions, but the court has set up audio feeds for the public and media.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.