Nintendo says the success of its new Switch console will help it to double annual profits.
It has become the fastest-selling games console in the Japanese firm’s history, with 2.7 million units bought in March – the first month it was available.
But Nintendo’s profit estimate of 65bn yen ($583.9m; £453m) for the year to March 2018 was below market forecasts.
Like other console makers, Nintendo is having to counter the rise of the smartphone as a tool for gaming.
And because – unlike Sony and Microsoft – Nintendo relies on games and consoles for almost all its sales, it is arguably more vulnerable to this trend.
Nintendo said it was aiming to sell 10 million units of the Switch by March 2018 – which would make it the firm’s biggest hit since the Wii launched in November 2006.
“I was relieved by a strong start of the Switch,” said Nintendo president Tatsumi Kimishima
“If the 10 million target is achieved… that means the sales momentum would be close to the Wii.”
He batted away criticism that the profit forecast was too low, saying that the money spent marketing the Switch was eating into profits.
The Switch looks like a tablet computer with Joy-Con controllers that attach to its sides, and can be played both on televisions and as a standalone device.
It launched with a just handful of games, with some critics saying there were too few.
But the popularity of one game – The Legend of Zelda: Breath of the Wild – is believed to be a driver for many of the sales.
Soon after the launch, thousands of owners of Switch complained about dead or stuck pixels creating distracting and annoying dark squares on their screens.