Nintendo reported quarterly earnings that topped estimates, as higher software sales online made up for weaker shipments of the Switch console.
The company's operating profit was 30.5 billion yen ($274 million) in the June quarter. Revenue was 168 billion yen. Nintendo maintained its full-year forecasts for profit, hardware and software sales.
With Switch software and hardware shipments holding up, new President Shuntaro Furukawa is ready to focus on the launch of Nintendo's online game service in September. The Switch, a hybrid console that can be used at home or on-the-go, is Nintendo's biggest bet in years.
Nintendo said it sold 18 million Switch software titles, up from 8.1 million last year, as more people downloaded games from the company's more profitable online store. Switch owners on average each bought 0.9 games during the quarter, down from 1.7 last year. It sold 1.9 million Switch hardware units in the June quarter, slightly less than the 2 million seen in the same period a year earlier.
Nintendoalso sold 1.4 million Labo units during the quarter, meaning just 7 percent of Switch owners bought the new cardboard products. Introduced in mid-April, the goal was to promote more physical gameplay while appealing to families and children. Instead, many found the build-it-yourself Labo kits difficult to assemble and its games lacking engaging features to keep kids coming back.
Revenue from smartphone games was 9.1 billion yen in the quarter, unchanged from a year earlier. The company has yet to provide details or a release date for its mobile racing game Mario Kart Tour, which was announced in February.