Quarterly profit jump fuelled largely by unknown US refund amount as Japanese video game giant records overall sales drop
Nintendo has reported a jump in profits, as the Japanese game maker’s earnings were buoyed up by a long-awaited refund on Donald Trump’s tariffs.
The company said profits surged 53.5% to ¥147.4bn (£694m) over the three months to June, substantially beating expert forecasts for ¥77.8bn.
The company said sales of its Switch 2 console, which was released last summer, “maintained strong sales momentum”, while popular games like Yoshi and the Mysterious Book, Star Fox, and Pokémon Pokopia “performed steadily”. However, that did not make up for an overall drop in sales compared with the same period last year, with revenue dropping by 10% to ¥517.8bn.
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Instead, Nintendo said profits were aided by a refund on American tariffs, after the US supreme court ruled earlier this year that Trump’s “Liberation Day” trade levies, slapped on countries across the world last year, were illegal.
The Trump administration has refunded about $100bn from the tariffs charged before the court ruling, representing 60% of the total $165bn collected. Trump has continued to pitch tariffs as a solution for the US economy, bringing back domestic production, securing better trade deals and closing the deficit in the federal budget.
Nintendo’s Tokyo-listed shares were up 2.87% on Thursday after the earnings release.
Nintendo filed a lawsuit weeks after the supreme court ruling, demanding a full refund from the White House that would cover what it spent on tariffs, plus interest, in an effort to recoup its costs.
While a refund now appears to have come through, the company stopped short of confirming the full amount, at a time when it is still battling calls to pass those refunds on to consumers.
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Last month, Nintendo was hit with a class action lawsuit on behalf of customers, which claims the firm hiked prices because of tariffs but later benefited from the refunds. Nintendo’s lawyers described the lawsuit as “meritless”, and that the price customers paid “represents the purchase price of the goods they wanted and received.”
Last month, the US president imposed a fresh round of tariffson more than 80 countries, including Japan, in a move likely to pose fresh problems for companies such as Nintendo. However, a coalition of 25 US states are now suing the Trump administration over the levies, potentially opening the door to another round of refunds for beleaguered exporters.
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