Nintendo’s (NTDOY) latest game console, the Switch, isn’t only lifting the fortunes of the Japanese game maker, it also helped struggling Best Buy Co. Inc. (BBY) post a gain in sales for its first quarter.
Earlier Thursday, the consumer electronics retailer posted comparable store sales in the first three months of the year that increased 1.6% and reported net income of $188 million or $0.60 a share. Analysts had expected the company to weigh in with same store sales that declined 1.5% and earnings of $0.40 a share. Revenue increased 1% to $8.53 billion, also surpassing the Wall Street consensus, which stood at sales of $8.28 billion. In a statement, Best Buy Chief Executive Hubert Joly said the company’s good showing on the revenue front was due to strong performance in gaming during the quarter. (See also: How Home Depot, Best Buy, Wal-Mart Can Beat Amazon.)
Nintendo’s latest game console, the Switch, made its debut in early March and has since been selling out all over the globe. It uses a dock when it functions as a console and switches to portable mode when lifted out of the dock. The strong response to the device has prompted the Japanese company to increase the number of units produced with The Wall Street Journal reporting in March that companies that assemble the Nintendo Switch plan to manufacture 16 million more units. Originally, the plan was to assemble 8 million units.
In March alone, the company said it sold close to 1 million Switch units in the U.S. The Japanese game maker said it latest game console has sold faster at its launch than any other video game system in the company’s history. (See also: Nintendo Shipped 740K More Switch Units in March Than It Expected To.)
It’s not only Best Buy that is benefiting from the new device. According to Bloomberg, Target Corp. (TGT) said last week sales of electronics “leapt forward” because of the Switch, which the retailer had been promoting both online and in its brick-and-mortar stores. Recently, shares of Best Buy were climbing 9% higher to $59.40. The results are also lifting shares of GameStop Corp. (GME) which is slated to report quarterly earnings results after the close of trading Thursday. GameStop’s stock was up 2.84%, or $0.65, to $23.35.
Earlier in the week, Credit Suisse analyst Seth Sigman said in a research note to clients covered by Barron’s that the gaming retailer likely sold 1.2 million Switch devices in March and April, which will result in a 17% increase in hardware sales on a year-over-year basis. Software, however, didn’t fare so well, even if Nintendo’s Legend of Zelda: Breath of the Wild game is enjoying brisk sales. Sigman predicts sales in that area will decline 2% and would have fared even worse if it weren’t for Legend of Zelda and Mario Kart, which gamers purchased when they bought their Switches.