Nintendo : Annual Report 2024

Annual Report 2024

for the fiscal year ended March 31, 2024

Nintendo Co., Ltd.

	Table of Contents
Information on the Company	2
I.	Overview of the Company	2
1.	Key financial data and trends	2
2.	History	4
3.	Description of business	5
4.	Subsidiaries and associates	6
5.	Employees	8
II.	Business Overview	10
1.	Management policy, management environment, issues to address	10
2.	Approach to and initiatives for sustainability	11
3.	Risk factors	14
4.	Analysis of financial position, operating results and cash flow by management	17
5.	Material contracts, etc	20
6.	Research and development activities	21
III.	Equipment and Facilities	22
1.	Overview of capital investments	22
2.	Major facilities	22
3.	Plans for new installation and retirement of equipment and facilities, etc	23
IV.	Profile of the Company	24
1.	Status of shares and other relevant matters	24
2.	Status of acquisition of treasury shares and other relevant matters	30
3.	Dividend policy	31
4.	Corporate governance	32
V.	Financial Information	51
	Consolidated financial statements, etc	51

Documents hereto titled "Annual Report" are based on the Company's Annual Securities Report (Japanese only) prepared following the Financial Instruments and Exchange Act for the purpose of providing accurate financial information and other information in a manner that is easy to understand. In the event of any discrepancy between these translated documents and the Japanese originals, the originals shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translations.

[NOTE: Basis of Presenting Consolidated Financial Statements]

The accompanying consolidated financial statements of Nintendo Co., Ltd. (the "Company") and its consolidated subsidiaries are compiled from the consolidated financial statements prepared by the Company as required by the Financial Instruments and Exchange Act of Japan and are prepared on the basis of accounting principles and practices generally accepted in Japan, which are different in certain respects as to application and disclosure requirements of the International Financial Reporting Standards. The financial statements of the Company and its subsidiaries in Japan are prepared on the basis of the accounting and relevant legal requirements in Japan. The financial statements of consolidated subsidiaries outside of Japan are prepared on the basis of the accounting and relevant legal requirements of their countries of domicile and no adjustment has been made to their financial statements in consolidation to the extent that significant differences do not occur, as allowed under the generally accepted accounting principles and practices in Japan.

Each amount in the accompanying consolidated financial statements is rounded down to the nearest one million yen or one billion yen. Consequently, the totals shown in the accompanying consolidated financial statements do not necessarily agree with the sums of the individual amounts.

The consolidated financial statements presented herein are stated in Japanese yen, the currency of the country in which the Company is incorporated and operates. The rate of ¥151 to 1 USD, the approximate current rate of exchange on March 31, 2024, has been applied for the purpose of presentation of the accompanying consolidated financial statements in U.S. dollars. These amounts in U.S. dollars are included solely for convenience and are unaudited. These translations do not imply that the actual Japanese yen amounts have been or could be converted into U.S. dollars at this or any other rate of exchange.

The accompanying consolidated financial statements are not intended to present the consolidated financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Japan.

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Information on the Company

I. Overview of the Company

1. Key financial data and trends

Consolidated financial data

Fiscal year		80th	81st	82nd	83rd	84th
Fiscal year ended March 31	2020	2021	2022	2023	2024
Net sales	(Millions of yen)	¥1,308,519	¥1,758,910	¥1,695,344	¥1,601,677	¥1,671,865	USD 11,071
(Millions of dollars)
Operating profit
	(Millions of yen)	352,370	640,634	592,760	504,375	528,941	3,502
(Millions of dollars)
Ordinary profit
	(Millions of yen)	360,461	678,996	670,813	601,070	680,497	4,506
(Millions of dollars)
Profit attributable to owners of
parent			258,641	480,376	477,691	432,768	490,602	3,249
	(Millions of yen)
(Millions of dollars)
Comprehensive income
	(Millions of yen)	236,490	527,951	530,498	486,661	573,849	3,800
(Millions of dollars)
Net assets	(Millions of yen)	1,540,900	1,874,614	2,069,310	2,266,466	2,604,998	17,251
(Millions of dollars)
Total assets	(Millions of yen)	1,934,087	2,446,918	2,662,384	2,854,284	3,151,394	20,870
(Millions of dollars)
Net assets per share	(Yen)	1,293.35	1,573.48	1,763.56	1,946.55	2,236.45	14
		(Dollars)
Profit per share		(Yen)	217.12	403.26	404.67	371.41	421.39	2
		(Dollars)
Diluted profit per share	(Yen)	-	-	-	-	-	-
		(Dollars)
Capital adequacy ratio		79.66	76.60	77.71	79.40	82.62	-
		(%)
Return on equity (ROE)		17.53	28.13	24.23	19.96	20.15	-
		(%)
Price earnings ratio (PER)	19.16	15.33	15.24	13.82	19.45	-
		(Times)
Cash flows from operating
activities			347,753	612,106	289,661	322,843	462,097	3,060
	(Millions of yen)
(Millions of dollars)
Cash flows from investing
activities			(188,433)	(136,533)	93,699	111,507	(630,632)	(4,176)
	(Millions of yen)
(Millions of dollars)
Cash flows from financing
activities			(111,031)	(194,938)	(337,010)	(290,973)	(236,958)	(1,569)
	(Millions of yen)
(Millions of dollars)
Cash and cash equivalents at
end of period	(Millions of yen)	¥621,402	¥932,079	¥1,022,718	¥1,194,569	¥853,432	USD 5,651
(Millions of dollars)
Number of employees (Persons)	6,200	6,574	6,717	7,317	7,724	-

(Notes) 1. Effective from the beginning of the 82nd fiscal year (ended March 31, 2022), the Company has adopted the "Accounting Standard for Revenue Recognition, etc. (Accounting Standards Board of Japan (ASBJ) Statement No. 29 of March 31, 2020)." The accounting standard has been applied to the major management indicators for the 82nd fiscal year onward.

1. "Diluted profit per share" is not noted because the Company has not issued any dilutive shares.
2. The Company enacted a 10-for-1 stock split of its common stock with an effective date of October 1, 2022. Net
3. • 2 -

assets per share and profit per share are calculated based on the assumption that the stock split was implemented at the beginning of the 80th fiscal year.

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2. History

November 1947	Established as Marufuku Co., Ltd. in Higashikawara-cho, Imagumano, Higashiyama-ku, Kyoto,
	Japan as a manufacturer/distributor of Japanese playing cards (karuta) and western playing cards.
September 1949	Changed the company's name to Marufuku Karuta Hanbai Co., Ltd.
March 1950	Changed the company's name to Nintendo Karuta Co., Ltd. and took over karuta manufacturing
	operations of Yamauchi Nintendo & Co. (currently Yamauchi Co., Ltd.)
July 1951	Changed the company's name to Nintendo Playing Card Co., Ltd.
September 1959	Moved the headquarters to 60 Kamitakamatsu-cho, Fukuine, Higashiyama-ku, Kyoto, Japan.
September 1961	Established the Tokyo Branch in Tokyo, Japan.
January 1962	Listed stock on the Second Section of the Osaka Securities Exchange and on the Kyoto Stock
	Exchange.
October 1963	Changed the company's name to Nintendo Co., Ltd. (current trade name).
July 1970	Stock listing was changed to the First Section of the Osaka Securities Exchange.
April 1980	Established a wholly-owned subsidiary, Nintendo of America Inc., in New York, U.S.A.
February 1982	Established a new wholly-owned subsidiary, Nintendo of America Inc. (currently a consolidated
	subsidiary), in Washington, U.S.A. and merged the New York subsidiary into it through an
	absorption-type merger.
July 1983	Listed stock on the First Section of the Tokyo Stock Exchange.
November 1983	Established a new plant in Makishima-cho, Uji City, Kyoto, Japan (currently Uji Plant).
February 1990	Established a wholly-owned subsidiary, Nintendo of Europe GmbH, in Germany (currently
	Nintendo of Europe AG, a consolidated subsidiary).
November 2000	Moved the headquarters to 11-1Hokotate-cho, Kamitoba, Minami-ku, Kyoto, Japan (current
	location).
July 2006	Established a wholly-owned subsidiary, Nintendo of Korea Co., Ltd., in South Korea (currently
	a consolidated subsidiary).
June 2016	Transitioned to a Company with an Audit and Supervisory Committee.
April 2017	Acquired shares of JESNET Co. Ltd. and changed its trade name to Nintendo Sales Co., Ltd.
	(currently a consolidated subsidiary).
April 2022	Transitioned to the Prime Market from the First Section due to the market restructuring of the
	Tokyo Stock Exchange.

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3. Description of business

In the field of home entertainment, Nintendo Co., Ltd. and its subsidiaries and associates (composed of 28 subsidiaries and five associates as of March 31, 2024), primarily engage in the development, manufacture and sales of entertainment products. Nintendo's major products are computer-enhanced "dedicated video game platforms," character merchandise, and playing cards. "Dedicated video game platforms" are defined as hardware and software for the handheld systems and home consoles developed by Nintendo Co., Ltd. and its subsidiaries and associates, manufactured by Nintendo Co., Ltd. and sold mainly by its subsidiaries and associates in Japan and other countries. Nintendo Co., Ltd. and its subsidiaries and associates have also entered into businesses utilizing IP such as visual content and mobile applications.

The positions of Nintendo Co., Ltd. and its main subsidiaries and associates are described below. Segment information is omitted as Nintendo operates as a single business segment.

- Development

Nintendo Co., Ltd.; Nintendo Technology Development Inc.; Nintendo Software Technology Corporation; Retro Studios, Inc.; Next Level Games Inc.; Nintendo European Research and Development SAS; iQue (China) Ltd.; ND CUBE Co., Ltd.; 1-UP Studio Inc.; MONOLITH SOFTWARE INC.; Mario Club Co., Ltd.; SRD Co., Ltd.; Nintendo Pictures Co., Ltd.; Nintendo Systems Co., Ltd.

• Manufacture Nintendo Co., Ltd.
• Sales

Nintendo Co., Ltd.; Nintendo of America Inc.; Nintendo of Canada Ltd.; Nintendo of Europe AG; Nintendo Ibérica, S.A.; Nintendo Australia Pty Limited; Nintendo of Korea Co., Ltd.; Nintendo (Hong Kong) Limited; Nintendo Sales Co., Ltd.

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4. Subsidiaries and associates

1. Consolidated subsidiaries

						Relationship with Nintendo Co., Ltd.
				Percentage			(the "Company")
		Share capital	Description	of voting	Concurrent positions
Name of company	Location	or investments	of principal	rights held	held by directors
		in capital	business	by the	Director	Employee	Loans	Business transactions	Leasing of
				Company	of the	of the	fixed assets
					Company	Company
					(number)	(number)
Nintendo of		Thousands of						Purchase of products
U.S.	USD	Sales	100	-	-	-	manufactured by the	-
America Inc. *1, 2
	110,000						Company
								Purchase of products
Nintendo of Canada		Thousands of		100				manufactured by the
Canada	CAD	Sales	-	-	-	Company from	-
Ltd.	(100)
	4,000					Nintendo of America
								Inc.
Nintendo of Europe		Thousands of						Purchase of products
Germany	EUR	Sales	100	-	1	-	manufactured by the	-
AG *1, 2
	30,000						Company
								Purchase of products
Nintendo Ibérica,		Thousands of		100				manufactured by the
Spain	EUR	Sales	-	-	-	Company from	-
S.A.	(100)
	3,000					Nintendo of Europe
								AG
Nintendo Australia		Thousands of						Purchase of products
Australia	AUD	Sales	100	-	1	-	manufactured by the	-
Pty Limited
	8,500						Company
Nintendo of Korea		Millions of						Purchase of products
Korea	KRW	Sales	100	-	4	-	manufactured by the	-
Co., Ltd. *1
	25,000						Company
								Purchase of products
								manufactured by the
Nintendo (Hong		Thousands of						Company and
China	HKD	Sales	100	-	3	-	entrusted purchase of	-
Kong) Limited
	49,300						parts for products
								manufactured by the
								Company
Nintendo		USD						Entrusted
Technology	U.S.	Development	100	1	1	-	development of	-
1
Development Inc.							hardware OS etc.
Nintendo Software		Thousands of						Entrusted
Technology	U.S.	USD	Development	100	1	1	-	development of	-
Corporation		20						software
Retro Studios, Inc.		Thousands of						Entrusted
U.S.	USD	Development	100	1	-	-	development of	-
*1
	10,001						software
Next Level Games		Thousands of						Entrusted
Canada	CAD	Development	100	1	-	-	development of	-
Inc.
	11						software
Nintendo European		Thousands of						Entrusted
Research and	France	EUR	Development	100	-	1	-	development of	-
Development SAS		300						software
iQue (China) Ltd.		Millions of						Entrusted
China	CNY	Development	100	-	1	-	development of	-
*1
	254						software
									Leasing of
Nintendo Sales Co.,	Chiyoda-ku,	Millions of						Purchase of products	buildings,
JPY	Sales	100	-	6	-	manufactured by the	etc. owned
Ltd. *1, 2	Tokyo
300						Company	by the
									Company
ND CUBE Co., Ltd.	Chuo-ku,	Millions of						Entrusted
JPY	Development	99	-	2	-	development of	-
Tokyo
	483						software
									Leasing of
1-UP Studio Inc.	Chiyoda-ku,	Millions of						Entrusted	buildings,
JPY	Development	100	-	3	-	development of	etc. owned
Tokyo
	90						software	by the
									Company
MONOLITH	Meguro-ku,	Millions of						Entrusted
JPY	Development	97	-	3	-	development of	-
SOFTWARE INC.	Tokyo
75						software

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						Relationship with Nintendo Co., Ltd.
				Percentage			(the "Company")
		Share capital	Description	of voting	Concurrent positions
Name of company	Location	or investments	of principal	rights held	held by directors
		in capital	business	by the	Director	Employee	Loans	Business transactions	Leasing of
				Company	of the	of the	fixed assets
					Company	Company
					(number)	(number)
									Leasing of
Mario Club Co.,	Higashiyama	Millions of						Entrusted inspection	buildings,
JPY	Development	100	-	4	-	etc. owned
Ltd.	-ku, Kyoto	of software etc.
450						by the
									Company
SRD Co., Ltd.	Shimogyo-	Millions of						Entrusted
JPY	Development	100	-	2	-	development of	-
ku, Kyoto
	50						software
									Leasing of
Nintendo Pictures	Chiyoda-ku,	Millions of						Entrusted planning	buildings,
JPY	Development	100	-	3	-	and production of	etc. owned
Co., Ltd.	Tokyo
34						visual content	by the
									Company
								Entrusted	Leasing of
Nintendo Systems		Millions of						buildings,
Shibuya-ku,						development and
JPY	Development	80	1	5	-	etc. owned
Co., Ltd. *1	Tokyo	operation of systems,
5,000						by the
						etc.
								Company

(Notes) 1. There are five other consolidated subsidiaries not listed above.

1. Figures in parentheses in "Percentage of voting rights held by the Company" represent the proportion of indirect ownership.
2. Companies marked with *1 are specified subsidiaries.
3. Proportion of sales of consolidated subsidiaries marked with *2, excluding inter-company transactions of sales, over total sales on a consolidated basis surpasses 10%. Major financial information is as follows.

Name of company	Net sales	Ordinary profit	Profit	Total net assets	Total assets
(Millions of yen)	(Millions of yen)	(Millions of yen)	(Millions of yen)	(Millions of yen)
Nintendo of	682,006	88,559	68,353	521,885	756,349
America Inc.
Nintendo of	385,273	13,041	9,364	151,787	258,372
Europe AG
Nintendo Sales	223,959	13,159	9,100	63,046	85,166
Co., Ltd.
Name of company	Net sales	Ordinary profit	Profit	Total net assets	Total assets
(Millions of dollars)	(Millions of dollars)	(Millions of dollars)	(Millions of dollars)	(Millions of dollars)
Nintendo of	4,516	586	452	3,456	5,008
America Inc.
Nintendo of	2,551	86	62	1,005	1,711
Europe AG
Nintendo Sales	1,483	87	60	417	564
Co., Ltd.

1. Associates accounted for using equity method

							Relationship with the Company
				Percentage
				Concurrent positions
		Share capital	Description	of voting
Name of company	Location	held by directors
or investments	of principal	rights held
					Leasing of
Director		Employee
		in capital	business	by the		Loans	Business transactions
		of the		of the	fixed assets
				Company
				Company		Company
					(number)		(number)
			Sales and						Purchase of products
The Pokémon		Millions of						manufactured by the
Minato-ku,	licensing of
JPY	32	1		-	-	Company and entrusted	-
Company	Tokyo	Pokémon
365						manufacturing of
	related goods
								products
(Note) There are three associates accounted for using equity method other than the one shown above.

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5. Employees

Segment information is omitted as Nintendo (the Company and its consolidated subsidiaries) operates as a single business segment.

(1) Information about group

As of March 31, 2024

Number of employees (persons)

7,724

(Note) Number of employees represents the number of persons employed, excluding persons seconded from the Company group to outside the Company group, but including persons seconded to the Company group from outside the Company group. It also includes part-time workers hired on a regular basis.

(2) Information about reporting company

As of March 31, 2024

Number of employees	Average age	Average length of service	Average annual salary
(persons)	(years)	(years)
2,814	40.2	13.9	9,626,857 yen
(USD 63,754)

(Notes) 1. Number of employees represents the number of persons employed, excluding persons seconded from the Company to outside the Company, but including persons seconded to the Company from outside the Company.

1. 2. Average annual salary is the amount paid inclusive of tax in the fiscal year ended March 31, 2024, including extra wages and bonuses.

2. Labor unions
   Labor unions do not exist in the Company but have been formed at some of its consolidated subsidiaries. Labor-management relations have been good, and there are no particular matters to be noted.

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