Nintendo spent $880 million on research and development last year, mentions next platform after Switch

There are several reasons for the increase in spending.

Image via Nintendo

Nintendo’s latest financial report for the fiscal year that ended on March 31 shows the company had its highest operating profit ever, 36 different titles that sold over one million copies on the Switch during that period, and 84.59 million units sold for the console. 

But one of the most interesting aspects of the financial report is Nintendo’s continued heavy spending on research and development, with approximately $880 million going into R&D between April 2020 and March 31. 

This was highlighted by Daniel Ahmad, senior analyst at Niko Partners, and later summarized by games analyst and adviser David Gibson, who highlighted portions of Nintendo’s actual results call. 

When asked about the specifics of the R&D spending during the question and answer portion of the call, one Nintendo representative noted because the Switch is halfway through its lifecycle, software and additional outsourcing costs are increasing for the console. That also includes the cost per title being developed increasing, investing in online features, and other areas as needed. 

Along with that, the speaker also said that, despite the console only being at an estimated midway of its hardware cycle, some of that investment has gone towards “the next platform, where hardware and software integrated will continue.”

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That comment plays into the rumors of an updated Switch model being released later this year, but it could also mean that Nintendo has only just begun laying the groundwork for whatever console will release once the hybrid-device reaches the end of its lifecycle. 

The actual financial report documents don’t mention any specifics about R&D spending outside of the total amount being listed and noting a “a rise in research and development expenses.” So for now, these comments are the only information we have to go on until Nintendo announces new hardware in the future.