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 ۵۳.۵% to ¥۱۴۷.۴bn (£۶۹۴m) over the three months to June, substantially beating expert forecasts for ¥۷۷.۸bn.
Nintendo said sales of its Switch ۲ console, which was released last summer, “maintained strong sales momentum”, while popular games such as 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 down by ۱۰% to ¥۵۱۷.۸bn.
Instead, Nintendo said profits were aided by a refund on US tariffs, after the country’s supreme court ruled in February that Donald Trump’s sweeping “liberation day” trade levies were illegal.
The Trump administration has refunded about $۱۰۰bn from the tariffs charged before the court ruling, representing ۶۰% of the total $۱۶۵bn 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 ۲.۸۷% on Thursday after the earnings release.
The company filed a lawsuit weeks after the US supreme court ruling, demanding a full refund from the White House that would cover what it spent on tariffs, plus interest.
While a refund now appears to have come through, Nintendo stopped short of confirming the full amount, at a time when it is still appears to be resisting 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 company hiked its prices because of tariffs but later benefited from the refunds. Nintendo’s lawyers described the lawsuit as “meritless”, and that the price customers paid represented “the purchase price of the goods they wanted and received.”
Last month, Trump imposed a fresh round of tariffs on more than ۸۰ countries, including Japan, in a move that is likely to pose further problems for companies such as Nintendo. However, a coalition of ۲۵ US states are now suing the Trump administration over the levies, potentially opening the door to another round of refunds for beleaguered exporters.
