Annual Report 2018
for the fiscal year ended March 31, 2018

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. Description of business............................................................................................................................. 3
3. Subsidiaries and associates ....................................................................................................................... 4
II. Business Overview.................................................................................................................................... 6
1. Management policy, management environment, issues to address .............................................................. 6
2. Risk factors .............................................................................................................................................. 7
3. Analysis of financial position, operating results and cash flow by the management .................................... 9
4. Research and development activities ....................................................................................................... 13
III. Equipment and Facilities ......................................................................................................................... 14
1. Overview of capital investments............................................................................................................... 14
2. Plans for new installation and retirement of equipment and facilities, etc. ................................................. 14
IV. Profile of the Company ........................................................................................................................... 15
1. Status of shares and other relevant matters .............................................................................................. 15
2. Status of acquisition of treasury shares and other relevant matters ........................................................... 17
3. Dividend policy...................................................................................................................................... 18
4. Members of the Board of Directors ......................................................................................................... 19
5. Corporate governance............................................................................................................................. 22
V. Financial Information .................................................................................................................................. 29
Consolidated financial statements, etc. ......................................................................................................... 29
Notes to Consolidated Financial Statements ................................................................................................. 37

These documents 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 otherinformation 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 thistranslation 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 requested by the
Financial Instruments and Exchange Act of Japan and are prepared on the basis of accounting principles andpractices 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
domestic subsidiaries are prepared on the basis of the accounting and relevant legal requirements in Japan. The
financial statements of the overseas consolidated subsidiaries are prepared on the basis of the accounting andrelevant 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 of 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 notnecessarily agree with the sums of the individual amounts.
The consolidated financial statements presented herein are stated in Japanese yen, the currency of the country inwhich the Company is incorporated and operates. The rate of ¥106 to 1 USD, the approximate current rate ofexchange on March 31, 2018, has been applied for the purpose of presentation of the accompanying consolidated
financial statements in US dollars. These amounts in US dollars are included solely for convenience and are
unaudited. These translations should not be construed as representations that the Japanese yen amounts actually
represent, have been or could be converted into US 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 incountries and jurisdictions other than Japan.

- 1 -Information on the Company
I. Overview of the Company
1. Key financial data and trends
Consolidated financial data
Fiscal year

74th

75th

76th

77th

78th

Fiscal year ended March 31

2014

2015

2016

2017

2018

¥571,726¥549,780¥504,459¥489,095¥1,055,682

USD 9,959(46,425)

24,77032,881

29,362

177,557

1,675

6,086

70,53028,79050,364

199,356

1,880(23,222)

41,843

16,505102,574

139,590

1,316

17,971

59,373(3,689)104,525

134,090

1,265

Net sales(Millions of yen)
(Millions of dollars)

Operating profit (loss)(Millions of yen)
(Millions of dollars)

Ordinary profit(Millions of yen)
(Millions of dollars)Profit (loss) attributable toowners of parent(Millions of yen)
(Millions of dollars)

Comprehensive income(Millions of yen)
(Millions of dollars)

Net assets(Millions of yen)
(Millions of dollars)

1,118,438

1,167,556

1,160,901

1,250,972

1,323,574

12,486

Total assets(Millions of yen)
(Millions of dollars)

1,306,410

1,352,944

1,296,902

1,468,9781,633,748

15,412

Net assets per share(Yen)(Dollars)

9,447.00

9,862.52

9,662.73

10,412.59

10,980.45

103.58

Profit (loss) per share(Yen)(Dollars)(183.59)353.49137.40853.87

1,162.30

10.96

Diluted profit per share(Yen)(Dollars)

–

–

–

–

―

–

85.60

86.29

89.50

85.15

80.74

–

–

3.66

1.42

8.51

10.86

–

–

50.00

116.45

30.26

40.32

–

(23,114)60,29355,19019,101

152,208

1,435(20,084)(105,394)(71,740)

69,51861,387579(127,163)(11,916)(2,996)(14,435)(61,311)(578)¥341,266¥281,539¥258,095¥330,974¥484,480

USD 4,570

Capital adequacy ratio(%)

Return on equity (ROE)(%)

Price earnings ratio (PER)(Times)Net cash provided by (used in)operating activities(Millions of yen)
(Millions of dollars)

Net cash provided by (used in)investing activities(Millions of yen)
(Millions of dollars)

Net cash provided by (used in)financing activities(Millions of yen)
(Millions of dollars)

Cash and cash equivalents at
end of period(Millions of yen)
(Millions of dollars)

Number of employees
5,213
5,120
5,064
5,166
–
5,501
[Separately, average number of
[717]
[667]
[633]
[622]
[–]
[529]
temporary employees] (Persons)(Notes) 1. Net sales do not include consumption taxes.
2. “Diluted profit per share” is not noted because the Company has not issued any dilutive shares.
3. “Return on equity” and “Price earnings ratio” for the 74th fiscal year are not noted because the Company recorded
net loss attributable to owners of parent in the 74th fiscal year.

- 2 -2. Description of businessIn the field of home entertainment, Nintendo Co., Ltd., its subsidiaries and associates (composed of 26 subsidiaries
and five associates as of March 31, 2018), primarily engage in the development, manufacture and sale ofentertainment products. Nintendo’s major products are categorized into computer-enhanced “dedicated video gameplatforms,” playing cards, Karuta and other products. “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 andassociates, manufactured by Nintendo Co., Ltd. and distributed primarily by its subsidiaries and associates inJapanese and overseas markets.
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., Nintendo European Research and Development SAS, iQue (China) Ltd., ND CUBE Co., Ltd., 1-UP
Studio Inc., MONOLITH SOFTWARE INC., Mario Club Co., Ltd.
- Manufacture
Nintendo Co., Ltd.
- SaleNintendo Co., Ltd., Nintendo of America Inc., Nintendo of Canada Ltd., Nintendo of Europe GmbH, Nintendo
France S.A.R.L., Nintendo Benelux B.V., Nintendo Ibérica, S.A., Nintendo Australia Pty Limited, Nintendo RU
LLC., Nintendo of Korea Co., Ltd., Nintendo (Hong Kong) Limited, Nintendo Sales Co., Ltd.

- 3 -

3. Subsidiaries and associates(1)

Consolidated subsidiaries

Name of company

Location

Capital stockor Investments
in capital

Descriptionof principal
business

Percentage
of votingrights heldby theCompany

Relationship with Nintendo Co., Ltd.
(the “Company”)
Concurrent positions
held by directors
Director Employeeof theof theCompany Company(number) (number)

Loans

Business transactions

Leasing of
fixed assets

Nintendo ofAmerica Inc. *1, 2

U.S.

Thousands of
USD 110,000

Sale

100

1

–

–

Purchasing products
manufactured by theCompany–

Nintendo of Canada
Ltd.

CanadaThousands of
CAD 4,000

Sale

100
(100)

1

–

–

Purchasing products
manufactured by theCompany from Nintendoof America Inc.

–

Nintendo of EuropeGmbH *1, 2Germany

Thousands of
EUR
30,000

Sale

100

–

1

–

Purchasing products
manufactured by theCompany–

Nintendo France
S.A.R.L. *1

FranceThousands of
EUR
10,000

Sale

100

–

1

–

Purchasing products
manufactured by theCompany from Nintendoof Europe GmbH–

Nintendo Benelux
B.V.

The
Netherlands

Thousands of
EUR
6,800

Sale

100

–

1

–

Purchasing products
manufactured by theCompany from Nintendoof Europe GmbH–

Nintendo Ibérica,
S.A.

Spain

Thousands of
EUR
3,000

Sale

100
(100)

–

1

–

Purchasing products
manufactured by theCompany from Nintendoof Europe GmbH–

Nintendo RU LLC.

RussiaMillions of
RUB
104

Sale

100
(100)

–

–

–

Purchasing products
manufactured by theCompany from Nintendoof Europe GmbH–

Nintendo Australia
Pty Limited

Australia

Thousands of
AUD 8,500

Sale

100

–

1

–

Purchasing products
manufactured by theCompany–

Nintendo of Korea
Co., Ltd. *1

Korea

Millions of
KRW
25,000

Sale

100

–

4

–

Purchasing products
manufactured by theCompany–

China

Thousands of
USD 29,000

Development

100
(100)

–

2

–

Entrusted developmentof software

–

U.S.

USD 1

Development

100

1

1

–

Entrusted developmentof hardware OS etc.

–

U.S.

Thousands of
USD 20Development

100

1

–

–

Entrusted developmentof software

–

U.S.

Thousands of
USD
10,001Development

100

1

–

–

Entrusted developmentof software––

iQue (China) Ltd.
*1
Nintendo
Technology
Development Inc.
Nintendo Software
Technology
Corporation
Retro Studios, Inc.
*1
Nintendo (HongKong) Limited

China

Thousands of
HKD 49,300

Sale

100

–

3

–

Purchase of products
manufactured by theCompany and entrusted
purchase of parts for
products manufacturedby the Company

Nintendo European
Research andDevelopment SAS

FranceThousands of
EUR
300

Development

100
(100)

–

1

–

Entrusted developmentof software–

Nintendo Sales Co.,
Ltd. *1, 2

Taito-ku,
Tokyo

Millions of
JPY
300

Sale

70

–

4

GrantedPurchasing products
manufactured by theCompany

Leasing ofbuildings,
etc. ownedby theCompany

ND CUBE Co., Ltd.

Chuo-ku,
Tokyo

Millions of
JPY
483

Development

97

–

2

–

Entrusted developmentof software–

1-UP Studio Inc.

Chiyoda-ku,
Tokyo

Millions of
JPY
90Development

100

–

3

–

Entrusted developmentof software

–

- 4 -

Name of company

Location

Capital stockor Investments
in capital

Descriptionof principal
business

Percentage
of votingrights heldby theCompany

Development

97

MONOLITH
SOFTWARE INC.

Meguro-ku,
TokyoMillions of
JPY
75

Mario Club Co.,Ltd.

Higashiyama-ku, Kyoto

Millions ofJPY
450(Notes) 1.
2.
3.
4.

Concurrent positions
held by directors
Director Employeeof theof theCompany Company(number) (number)
–

100

–

2

4

Loans

Business transactions

Leasing of
fixed assets–

Entrusted developmentof software––

Entrusted inspection ofsoftware etc.

Leasing ofbuildings
owned bytheCompany

There are five other consolidated subsidiaries not listed above.
Figures in parentheses in Percentage of voting rights held by the Company represent the proportion of indirectownership.
Companies marked with *1 are specified subsidiaries.
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.
Net sales(Millions of yen)

Ordinary profit(Millions of yen)

Profit(Millions of yen)

Total net assets(Millions of yen)

Total assets(Millions of yen)

Nintendo of America Inc.

418,025

47,191

29,033270,025

422,667

Nintendo of Europe GmbH242,369

4,291

2,660

74,661

157,067

Nintendo Sales Co., Ltd.

212,505

4,734

4,855

14,43755,942Name of company

Net sales(Millions of dollars)

Ordinary profit(Millions of dollars)Profit(Millions of dollars)

Total net assets(Millions of dollars)

Total assets(Millions of dollars)Nintendo of America Inc.

3,943

445

273

2,547

3,987

Nintendo of Europe GmbH

2,286

40

25

704

1,481

Nintendo Sales Co., Ltd.

2,004

44

45

136

527

Name of company(2)

Development

Relationship with Nintendo Co., Ltd.
(the “Company”)

Associates accounted for using equity method
Relationship with the Company
Percentage
of votingrights heldby theCompany

Capital stockor Investments
in capital

Descriptionof principal
business

Minato-ku,
TokyoMillions of
JPY
365

Sale andlicense of
Pokémonrelated goods

WARPSTAR, Inc.

Chiyoda-ku,
Tokyo

Millions of
JPY
10Animation
production
andintellectual
property
management50–

PUX Corporation

Kadoma-shi,
Osaka

Millions of
JPY
45Developmentof software
engine andlicensebusiness

27–

Name of company

The Pokémon
Company(Note)

Location

32

Concurrent positions
held by directors
Loans

Business transactions

Leasing of
fixed assets–

Purchasing products
manufactured by theCompany and entrusted
manufacturing ofproducts–

3–

Entrusted management ofmerchandising rights

Leasing ofbuildings
owned bytheCompany

1–

Entrusted developmentof software–

Director Employeeof theof theCompany Company(number) (number)

1–

There is one associate accounted for using equity method other than the ones listed above.

- 5 -II. Business Overview
1. Management policy, management environment, issues to address
Any forward-looking statements in the following discussion are based on the judgment of the Company group(the Company and its consolidated subsidiaries; also referred to as “Nintendo”) as of the consolidated fiscal year
ended March 31, 2018.
(1) Basic management policy
Nintendo strives to create new forms of entertainment while maintaining a robust business structure. To expand
our business, our highest emphasis is placed on providing users around the world with exciting forms ofentertainment that they have never experienced before.
(2) Targeted management index
It is essential for us to provide new and entertaining products and services consistently. In doing so, Nintendo
aims to improve its corporate value by sustaining robust growth while increasing profitability. Because Nintendo
deals with entertainment products and content that naturally hold many uncertainties in terms of research anddevelopment, we have not set any specific management index targets. This allows our corporate decision-making
to stay flexible in this highly competitive industry.
(3) Management environment, mid to long-term corporate business strategy and issues to address
Our industry is always required to offer products with exciting forms of entertainment. Under such amanagement environment, with the belief in our mission to put smiles on people’s faces around the world
through products and services, Nintendo will focus on expanding the number of people who have access toNintendo IP (intellectual properties) by offering products that everyone can enjoy, regardless of age, gender, or
gaming experience.
In accordance with our basic strategy, we will drive continual growth for Nintendo by expanding the dedicatedvideo game business and establishing the smart-device business. For our dedicated video game business, we plan
to keep our unique software-driven integrated hardware and software business at the core of our operations,while actively investing resources in our unique platform business. We plan to expand our smart-device business
into one of our major pillars of revenue, and in doing so, strengthen the foundations of the business, generatesynergy with our dedicated video game business, and maximize business for Nintendo as a whole.
Alongside our gaming business, we are also collaborating with our corporate partners to actively leverage
Nintendo IP through theme park projects, film, and merchandising. Through these efforts, we hope to pursue
every possible business opportunity and add value to our company by actively offering Nintendo IP in a variety
of different ways so that not only current users of our video games but all consumers – including those who used
to play our games but currently do not, and those who have never played our video games before – can also
experience Nintendo IP.
We will continue to flexibly transform ourselves by adapting to changing times while constantly valuing thespirit of originality based on the belief that “the true value of entertainment lies in its uniqueness” – and will
endeavor to continue providing products and services that people will be surprised and delighted by.
(4) Basic policy regarding the Company’s control
The Company’s Board of Directors believes that the decision of whether to accept another party’s tender or otheracquisition offer for the purpose of making large purchases of the Company’s stock ultimately should be
entrusted to its shareholders, given that the stock of the Company, which is a public company, is freely traded.
However, it is likely that certain tender or acquisition offers may harm the Company’s corporate value or thecommon interests of shareholders, depending on the intent of the offer, etc. The Company’s Board of Directors
maintains that such tender or acquisition offers are inappropriate.
As of now, any specific defensive measure in the event of a tender or acquisition offer has not yet officially been
introduced, but the Company has already set up an internal system to deal with such an event. If a tender or
acquisition offer is proposed, the Company will carefully judge its potential impact on its corporate value and thecommon interests of shareholders, and take appropriate measures with due care and prudent management.
Specifically, in addition to evaluating the offer with outside experts and negotiating with the party making theoffer, the Company will establish a task force to decide on whether any specific defensive measures arenecessary. If the offer is deemed favorable to the Company’s corporate value or the common interests of its
shareholders, the defensive measures will be determined and implemented in accordance with relevant laws andregulations.
- 6 -The Company will continue to consider adoption of any defensive measures for these situations, giving due
respect to laws, regulations and case law related to acquisitions, their interpretations by relevant authorities, etc.

2. Risk factors
Listed below are the various risks that could significantly affect Nintendo’s operating results, share price andfinancial condition. However, unpredictable risks may exist other than the risks set forth herein.
Note that matters pertaining to the future presented herein are determined by Nintendo as of the end of the fiscal
year ended March 31, 2018.
(1) Risks around economic environment• Fluctuation in foreign exchange rates
Nintendo distributes its products globally with overseas sales accounting for about 70% of its total sales. The
majority of monetary transactions are made in local currencies. In order to reduce the influence of fluctuations
in foreign exchange rates, we have implemented measures such as increasing purchases in US dollars;
however, it is difficult to eliminate the risks completely. In addition, the Company holds a substantial amountof assets in foreign currencies. Thus, fluctuations in foreign exchange rates have a strong influence not only
when accounts in foreign currencies are converted to Japanese yen but also when they are revaluated forfinancial reporting purposes.
(2) Risks around business activities• Fluctuation of market environment and competition against other companies
Nintendo’s business is engaged in one segment of the broad entertainment field. However, its business can beaffected by trends in other segments of the entertainment field. If consumer preferences shift to other forms ofentertainment, the video game market may shrink. The emergence of new competitors resulting fromtechnological innovation could have a detrimental impact as well.
In the video game industry, it may become even more difficult to be profitable due to large investments
required in research and development, and marketing. In addition, competition may intensify with large-scalecompanies doing business in the same industry or in other segments of the entertainment field. As a result,
Nintendo may experience difficulty in maintaining or expanding its market share as well as sustaining
profitability.
Furthermore, Nintendo may face rapid structural changes or the imposition of new laws and regulations and,if unable to adapt to such changes, be affected in terms of its business and performance.
• Development of new products
Although Nintendo continuously makes efforts to develop innovative and attractive products in the field ofcomputer entertainment, the development process is complicated and includes many uncertainties. The
various risks involved are as follows:a. Despite the substantial costs and time needed for development of software for dedicated video gameplatforms and applications for smart device gaming services, there is no guarantee that all new products
and services will be accepted by consumers due to ever shifting consumer preferences. Also, developmentof certain products may be suspended or aborted.
b. While development of hardware is time-consuming, with technology continuously advancing, theCompany may not be able to equip technologies required for entertainment. Furthermore, delays of
hardware launches could adversely affect market share.
c. Due to the nature of Nintendo products and services, it may become difficult to develop, sell or launch the
products and services as planned and the original plan could differ to a large extent.
• Product valuation and adequate inventory procurement
Products in the video game industry have relatively short life cycles, and are significantly impacted byconsumers’ preferences as well as seasonality. Although production is projected based on the forecasted
equilibrium point of supply and demand, it is difficult to forecast demand accurately, which may lead toexcess inventory. Obsolete inventory could have an adverse effect on Nintendo’s operations and financial
position.
• Dependency on outside manufacturers
Nintendo commissions a number of outside manufacturers to produce key components or assemble finishedproducts. In the event one or more of these businesses fail, Nintendo may have difficulty procuring key- 7 -components or manufacturing its products. In addition, suppliers may be unable to provide necessarycomponents on a timely basis. A shortage of key components could cause marginal decline due to higher costs,
shortage of products and quality control issues. These issues may impair the relationship between Nintendo
and its customers. Furthermore, as many suppliers’ production facilities are located overseas, potential
production interruptions caused by societal violence, natural disasters or any other accidents in the area could
negatively affect Nintendo’s operating performance.
• Business operations affected by seasonal fluctuation
A major portion of demand for Nintendo’s products is focused on the holiday season. Should Nintendo fail torelease attractive new products or supply hardware during that period, it would suffer unfavorable operating
performance.
• Problems in systems
Nintendo operates various Internet services, including competitive Internet-based games, download sales ofdigital software and service provision via Internet servers, in addition to providing information via the Internet.
In the event of the termination or destruction of the systems, or the leakage or unauthorized use of data, etc. asa result of, for example, a cyber-attack against these systems, a natural disaster or an accident, it could have an
adverse effect on Nintendo’s future operating results, share price and financial condition.
• Various factors affecting business activities
In addition to Japan, Nintendo engages in business in the United States, Europe, Australia, Asia and otherareas in the world. Domestic and overseas business activities involve risks such as a) disadvantages fromemergence of political or economic factors, b) disadvantages from inconsistency of multilateral taxation
systems and diversity of tax law interpretation, c) difficulty in recruiting and securing human resources, andd) social disruption resulting from terror attacks, war and other catastrophic events.
(3) Risks around legal regulations and litigation• Product liability
Nintendo manufactures its products in accordance with applicable quality control standards in locations ofsale. However, large-scale product recalls may occur, and any such recalls would likely be primarily causedby discovery of defective products. Also, the defect of a product may lead to product reimbursementcompensation resulting in additional expenses, and Nintendo’s reputation as well as its operating performanceand financial position may suffer.
• Limitations of enforcing intellectual property rights
Although Nintendo continues to accumulate various intellectual properties to produce different products, there
are geographical regions in which it is difficult to effectively tackle unauthorized uploading via the Internet
and counterfeit products, which may have a negative impact on Nintendo’s operating performance andfinancial position in the future.
• Leakage or unauthorized access of personal or confidential information
Nintendo possesses personally identifiable information about its consumers, as well as confidential
information concerning development and business operations. If such personally identifiable information orconfidential information were ever leaked outside of Nintendo, due to breach or other unauthorized access ordisclosure, it could have an adverse effect on Nintendo’s future operating performance, share price andfinancial condition.
• Changes in laws and regulations
Unpredicted enforcement of or changes in laws and regulations, adoptions of or changes in accounting
standards or taxation systems could have an effect on Nintendo’s performance and financial position. Conflictof views between Nintendo and the tax authorities may cause additional tax costs.
• Litigation
Nintendo’s operations in Japan and overseas may be subject to litigation, disputes and other legal procedures.
These issues may affect Nintendo’s operating performance.
(4) Other risks
Other than the risks set forth above, factors such as uncollectibility of notes and accounts receivable - trade,collapse of financial institutions, environmental restrictions or impairment of the corporate brand due tounforeseen circumstances may adversely affect Nintendo’s operating performance and financial position.

- 8 -3. Analysis of financial position, operating results and cash flow by the management
The description of the financial position, operating results and cash flow of Nintendo (the Company and its
consolidated subsidiaries) in the fiscal year ended March 31, 2018 (“operating results, etc.”) and the understanding,analysis and examination of Nintendo’s operating results, etc. from the management’s viewpoint are as follows.
Any forward-looking statements contained in the following overview are made based on information available as ofthe end of the fiscal year ended March 31, 2018.
Segment information is omitted as Nintendo operates as a single business segment.
(1) Important accounting procedures and estimates
Consolidated financial statements of Nintendo are prepared in accordance with accounting standards generally
accepted in Japan. In preparing such statements, estimates that may affect the value of assets, liabilities, revenue
and expenses are made based on the accounting procedures selected and adopted by management. Managementtakes into account past results and the likelihood of future events to make estimates in a reasonable fashion, but
uncertainties inherent to such estimates may cause the actual results to be materially different from theseestimates. Important accounting procedures adopted in the consolidated financial statements of Nintendo aredetailed in the section “V. Financial Information, Consolidated financial statements, etc., Significant mattersforming the basis of preparing the consolidated financial statements.”(2) Operating results, etc.
(i) Description and analysis of results
The results for the fiscal year ended March 31, 2018 show a very positive trend in global hardware sales forNintendo Switch, which sold a total of 15.05 million units during this fiscal year. On the software end, Super
Mario Odyssey has been a major hit with audiences worldwide, and sold 10.41 million units. This is inaddition to 9.22 million units sold for Mario Kart 8 Deluxe, and 6.02 million units sold for Splatoon 2,
bringing the total number of million-seller titles during this fiscal year to 12, including the titles of othersoftware publishers. The combined software sales results for this fiscal year reached 63.51 million units.
Nintendo 3DS hardware sales remained solid in each region even after the launch of Nintendo Switch, withsales during this fiscal year reaching 6.40 million units. For the Nintendo 3DS software, Pokémon Ultra Sun
and Pokémon Ultra Moon sold 7.51 million units, while overall sales for this fiscal year totaled 35.64 million
units.
Turning to our digital business for dedicated video game platforms, digital sales were very good, especially on
Nintendo Switch, which brought digital sales (see Note) to a combined total of ¥60.8 billion (USD 573
million) (87% increase on a year-on-year basis).
Meanwhile, the Super Nintendo Entertainment System: Super NES Classic Edition proved to be a hit in every
region, with sales totaling 5.28 million units, and we grew amiibo sales compared to the previous fiscal year,with approximately 10.30 million figures sold, while card sales hit approximately 5.80 million units.
In our smart-device business, we released Animal Crossing: Pocket Camp during this fiscal year to join Super
Mario Run and Fire Emblem Heroes, which have both been available since before the start of the fiscal year.
These applications are being enjoyed by many consumers in Japan and overseas. Our smart devices and IP
related income was ¥39.3 billion (USD 370 million) (62% increase on a year-on-year basis).
Nintendo’s management policy, management strategy, etc. are as described in “II. Business Overview, 1.
Management policy, management environment, issues to address.” The availability of hit titles and their sales
volumes are deemed to have a significant impact on operating results, etc., as described in “II. Business
Overview, 3. Analysis of financial position, operating results and cash flow by the management, (3) Factors
which may have a significant impact on operating results, etc.”[Note] “Download Sales” has been renamed to “Digital Sales” as of the end of the fiscal year ended March 31, 2018.

(ii) Description and analysis of operating results
Net sales, operating profit, ordinary profit and profit attributable to owners of parent in the fiscal year ended
March 31, 2018 increased from the previous fiscal year.
- 9 -Net sales reached ¥1,055.6 billion (USD 9,958 million; 115.8% increase on a year-on-year basis), of which
overseas sales were ¥794.4 billion (USD 7,494 million; 121.3% increase on a year-on-year basis, and 75.3%
of total sales). Operating profit came to ¥177.5 billion (USD 1,674 million; 504.7% increase on a year-on-yearbasis). Ordinary profit was ¥199.3 billion (USD 1,880 million; 295.8% increase on a year-on-year basis) due
to increase in operating profit and other factors, and profit attributable to owners of parent totaled ¥139.5
billion (USD 1,316 million; 36.1% increase on a year-on-year basis).
(Net sales and operating profit)
Net sales increased from the previous fiscal year by ¥566.5 billion (USD 5,344 million) to ¥1,055.6 billion(USD 9,958 million; an increase of 115.8% on a year-on-year basis), primarily due to the brisk sales ofNintendo Switch. Gross profit increased from the previous fiscal year by ¥204.6 billion (USD 1,930 million)to ¥403.5 billion (USD 3,806 million; an increase of 102.9% on a year-on-year basis). Due to such factors as
the increase in delivery expenses in association with the increase in net sales, as well as the increase inadvertising expenses related to the Nintendo Switch platform, selling, general and administrative expenses
increased from the previous fiscal year by ¥56.4 billion (USD 532 million), resulting in an operating profitof ¥177.5 billion (USD 1,674 million; an increase of 504.7% on a year-on-year basis).
(Non-operating income and expenses, and ordinary profit)
Net non-operating income was ¥21.7 billion (USD 204 million), due mainly to the ¥10.3 billion (USD 97
million) share of profit of entities accounted for using equity method related to The Pokémon Company andother investments. As a result, ordinary profit was ¥199.3 billion (USD 1,880 million; an increase of 295.8%
on a year-on-year basis).
Ordinary profit increased from the previous fiscal year primarily due to the increase in operating profit fromthe previous fiscal year, despite the decrease in the share of profit of entities accounted for using equity
method from the previous fiscal year.
(Profit attributable to owners of parent)
Profit attributable to owners of parent was ¥139.5 billion (USD 1,316 million; an increase of 36.1% on a
year-on-year basis), mainly due to the increase in ordinary profit from the previous fiscal year.
(iii) Description and analysis of financial position(Total assets)
Total assets increased by ¥164.7 billion (USD 1,553 million) compared to the previous fiscal year-end to¥1,633.7 billion (USD 15,412 million).
This was mainly due to the increase in cash and deposits by ¥81.7 billion (USD 770 million) from theprevious fiscal year attributable to such factors as the receipt of proceeds through operating activities, inaddition to the increase in inventories by ¥102.6 billion (USD 967 million) from the previous fiscal year
stemming from the increase in finished goods inventory, etc.
(Total liabilities)
Total liabilities increased by ¥92.1 billion (USD 868 million) compared to the previous fiscal year-end to¥310.1 billion (USD 2,925 million).
This was mainly due to the increase in notes and accounts payable - trade by ¥33.8 billion (USD 318
million) from the previous fiscal year owing to the increase in purchases related to the Nintendo Switch
platform, in addition to the increase in income taxes payable by ¥32.1 billion (USD 302 million) from theprevious fiscal year associated with an increase in taxable income.
(Net assets)
Net assets increased by ¥72.6 billion (USD 684 million) compared to the previous fiscal year-end to¥1,323.5 billion (USD 12,485 million).
- 10 -

This was mainly due to the posting of profit attributable to owners of parent in the amount of ¥139.5 billion(USD 1,316 million) and the payment of dividends of surplus in the amount of ¥64.8 billion (USD 611
million).
(iv) Description and analysis of cash flows
The ending balance of “Cash and cash equivalents” (collectively, “Cash”) as of March 31, 2018 was ¥484.4
billion (USD 4,569 million), with an increase of ¥153.5 billion (USD 1,448 million) during the fiscal year.
During the previous fiscal year, there was an increase of ¥72.8 billion. Net increase (decrease) of Cash andcontributing factors during the fiscal year ended March 31, 2018 are as follows:
Net cash provided by (used in) operating activities:
There were decreasing factors contributing to ¥201.0 billion (USD 1,896 million) of profit before income
taxes such as an increase in inventories and the posting of share of profit of entities accounted for using
equity method. However, due to increasing factors such as a decrease in notes and accounts receivable trade, net cash resulted in an increase of ¥152.2 billion (USD 1,435 million) compared to an increase of¥19.1 billion during the previous fiscal year.
Net cash provided by (used in) investing activities:
Net cash from investing activities increased by ¥61.3 billion (USD 578 million) compared to an increase of¥69.5 billion during the previous fiscal year mainly due to proceeds from withdrawal of time deposits andsales and redemption of short-term and long-term investment securities exceeding payments into time
deposits and purchase of short-term and long-term investment securities.
Net cash provided by (used in) financing activities:
Net cash from financing activities decreased by ¥61.3 billion (USD 578 million) compared to a decrease of¥14.4 billion during the previous fiscal year mainly due to cash dividends paid.
(3) Factors which have a significant impact on operating results, etc.
Nintendo operates as a business in the field of home entertainment, in which the availability of hit titles andtheir sales volumes may have a significant impact on its operating results, etc. In addition, the field ofentertainment is wide in scope, and any successful non-gaming propositions that provide consumers with moreentertainment value and surprises may also have an impact.
More than 70% of Nintendo’s total sales are generated in the overseas markets, with most transactions carriedout in local currencies. While Nintendo has attempted to increase dollar-based purchases in order to reduce theimpact of exchange rate fluctuations, it is difficult to completely eliminate their risk. As a result, exchange rate
fluctuations may have an impact on Nintendo’s financial performance.
While dedicated video game platforms and their compatible software, which are Nintendo’s main products,
represent a majority of total sales, hardware and software have very different profit margins, and fluctuations of
their proportions of the total sales may have an impact on gross profit and the gross profit percentage to sales.
In addition, there may be other fluctuating factors as described in “II. Business Overview, 2. Risk factors.”(4) Financial source of capital and liquidity of funds
The current ratio as of March 31, 2018, is 459%, and the ratio of total liabilities to cash and cash equivalents is
1.6 times.
Nintendo maintains retained earnings that are necessary in order to adapt to changes in the businessenvironment and to pursue further business expansion, etc. in the future.
Major components of the working capital requirements include purchase expenses of materials and parts for
manufacturing, advertising expenses and research and development expenses, and dividend and income tax
payments. Moreover, it is Nintendo’s basic policy to internally provide the capital necessary to fund future- 11 -

growth, including capital investments. Nintendo’s specific plans for capital investments are as described in “III.
Equipment and Facilities, 2. Plans for new installation and retirement of equipment and facilities, etc.”
During the launch periods of new products and the year-end sales season, there may be temporary increases innotes and accounts receivable - trade, notes and accounts payable - trade and inventories, which may have adownward or upward impact on net cash provided by (used in) operating activities.
Payments into or withdrawals from time deposits with maturities of more than three months, as well as timingof acquisition or sale of short-term investment securities, may have an upward or downward impact on net cash
provided by (used in) investing activities.

- 12 -

4. Research and development activities
Nintendo primarily engages in the active development of hardware and software for dedicated video game systems,with support from various companies and organizations, in its effort to put smiles on the faces of everyone
Nintendo touches around the world by offering new and compelling products that anyone can enjoy. We also
undertake the planning and development of smart-device application software.
With respect to hardware, we continuously investigate and undertake research on fundamental technologies
spanning data storage technology such as semiconductor memories, display technology such as liquid crystal
displays, and electronic components, while we also carry out research and development activities to examine theapplicability of various technologies including interfaces such as touch panels and sensors, wireless communication,
networks and security to the field of home entertainment. Our efforts are not limited to in-house studies andresearch in that we are also exploring various possibilities on a daily basis to discover technologies that will help
create new ways of playing by proactively turning our attention outside Nintendo. Moreover, we continue toenhance the durability, safety, quality and performance of our products to ensure that consumers can comfortably
enjoy them over an extended period, as well as design and develop various accessories, and pursue cost-cutting andenergy conservation initiatives.
With respect to software, we are focusing on taking full advantage of hardware features in planning its products,
designing games whose elements include graphics, music and game scripts, and developing programs.
Furthermore, in order to deal with digital business expansion, we have strongly driven the expansion of systeminfrastructure that supports various networking functions of software and multi-sectorial network services such as
Nintendo eShop.
In addition, we have established the research and development structure for smart device software to promote theplanning and development of smart device application software and the development of a back-end server system.
In terms of our component procurement and manufacturing processes, we, with the cooperation and support of ourmanufacturing partners, continuously examine, and accumulate relevant technical know-how on, how one can apply
new test methods and technologies in the mass production of components, and comply with relevant regulations.
Research and development expenses for the fiscal year were ¥64.0 billion (USD 603 million), with the outcomes ofmajor research and development activities described below. Segment information is omitted since we operate as asingle business segment.
For Nintendo Switch hardware, we not only launched a special hardware edition but also endeavored to develop
various functions including a video capture function and updated the hardware’s operating system. We released a
total of nine titles of compatible software (figure for the Japanese market), including: Mario Kart 8 Deluxe, a
popular race game; ARMS, our new IP in the form of a fighting game in which players hold the Joy-Con in both
hands to engage in a fight by throwing punches with motion-controlled extendable arms; Splatoon 2, the second
installment of the well-received Wii U software title Splatoon, in which players compete in splashing ink on the
ground; and Super Mario Odyssey, the latest title in the Super Mario series in 3D action format that throws players
into a world of adventure where they can exploit new actions, including throwing a cap to take control of enemies
and objects.
In the Nintendo 3DS family, we launched New Nintendo 2DS XL, and launched special hardware editions of eachmodel. We released a total of 11 compatible titles (figure for the Japanese market) including Pokémon Ultra Sun
and Pokémon Ultra Moon, the latest titles in the Pokémon series.
On the smart-device front, we launched the distribution of Animal Crossing: Pocket Camp, which we planned anddeveloped as a smart-device application based on our popular Animal Crossing series intended for smart devices, topropose a new way of enjoying games different from the series on dedicated video game systems.
Furthermore, we strengthened the security of Nintendo Account by introducing two-factor authentication, while for
My Nintendo, a comprehensive membership service which is positioned as a bridge connecting dedicated video
game platforms and smart devices, we enhanced its services such as making the points accumulated by gamesoftware purchases available for buying downloadable Nintendo Switch software.
We further enriched the lineup for amiibo and also launched the Super Nintendo Entertainment System: Super NES
Classic Edition.
In addition, on Nintendo Developer Portal, a dedicated website for game creators working on Nintendo platforms,
we offer support for game creators including individuals to deliver new entertainment to users around the world.
Moreover, we are working on the development of a new product that improves people’s QOL (Quality of Life) in
enjoyable ways. Our aim is to enable consumers to make daily efforts to improve their QOL in a fun manner bymaking sleep and fatigue status visible and offering various services based on this information.
Nintendo continues to engage in the development of new products for the future.
- 13 -

III. Equipment and Facilities
1. Overview of capital investments
Nintendo develops, manufactures and distributes electronic entertainment products, and in the fiscal year ended
March 31, 2018, it invested ¥13.082 billion (USD 123 million), which was mainly used for research anddevelopment facilities, and included intangible assets such as internal use computer software.
Regarding the required funds, all of the capital investments were self-financed and we did not raise externalfinancing. Segment information is omitted as Nintendo operates as a single business segment.

2. Plans for new installation and retirement of equipment and facilities, etc.
Plans for the installation of new equipment and facilities, etc. are as follows. There are no plans for retirement/saleof important equipment and facilities, excluding retirement/sale for the purpose of regular renewal. Segment
information is omitted as Nintendo operates as a single business segment. Actual capital investments by Nintendo
may vary significantly from the forecasts below due to factors including those stated in “II. Business Overview, 2.
Risk factors.”Company name
Nintendo Co., Ltd.
and its
consolidated
subsidiaries
Nintendo Co., Ltd.
and its
consolidated
subsidiaries
Nintendo Co., Ltd.
and its
consolidated
subsidiaries

Description ofequipment and facilities
Research anddevelopment
facilities

Planned investment amount
Total amount(Millions of yen)

Year/month ofAmount already paid commencement(Millions of yen)

Year/month ofscheduledcompletion

12,000(USD 113 million)

4,064(USD 38 million)

April 2017

March 2020

Production facilities
for molds, etc.

9,000
(USD 84 million)

1,640(USD 15 million)

April 2017

March 2020

Renovation,
updating, etc. ofother buildings, etc.

18,000(USD 169 million)

7,378(USD 69 million)

April 2017

March 2020

39,000(USD 367 million)

13,082(USD 123 million)

―

―

Total

(Notes) 1. Funds required for equipment and facilities, etc. in the future in the amount of ¥25,918 million (USD
244 million) referred to above are to be self-financed.
2. The above amounts do not include consumption taxes.

- 14 -

IV. Profile of the Company
1. Status of shares and other relevant matters(1) Total number of shares and other information(i) Total number of shares
Class

Total number of authorized shares to be issued (shares)

Common shares

400,000,000

Total

400,000,000(ii) Number of shares issued
Class

Number of shares
Number of shares
outstanding as of the end of outstanding as of issuancefiscal year
date of this report(March 31, 2018)(June 29, 2018)

Common shares

141,669,000

141,669,000

Total

141,669,000

141,669,000

Name of stock exchange on
which Nintendo is listed or
Description
name of authorized financial
instruments firm association
Tokyo Stock Exchange
Number of shares constituting a(First Section)
unit: 100 shares――(2) Status of share subscription rights and other relevant matters(i) Description of stock option scheme
Not applicable(ii) Description of rights plans
Not applicable(iii) Other matters regarding status of share subscription rights, etc.
Not applicable(3) Exercise status and other relevant matters concerning bonds with share subscription rights containing a clausefor exercise price adjustment
Not applicable(4) Trend of total number of shares issued, amount of common shares and other relevant matters
Date
May 21, 1991

Date
May 21, 1991

Change in the
Balance of the
Change in capital Balance of capital Change in legal
number of shares number of shares
stock
stock
capital surplus
issuedissued(Millions of yen) (Millions of yen) (Millions of yen)(thousand shares) (thousand shares)
36,72910,065―

11,584

Change in the
Balance of the
Change in capital Balance of capital
number of shares number of shares
stock
stock
issuedissued(Millions of(Millions of(thousand shares) (thousand shares)
dollars)
dollars)

Change in legal
capital surplus(Millions ofdollars)

Balance of legal
capital surplus(Millions ofdollars)―

109

36,729141,669

141,669―

Balance of legal
capital surplus(Millions of yen)―

94

(Note) On May 21, 1991, the Company split the number of shares held by shareholders recorded in the shareholder registry as of March 31,
1991 by the ratio of 1.35 shares per share.

- 15 -

(5) Status of shareholders
As of March 31, 2018
Status of shares (number of shares constituting a unit: 100 shares)
National and
Financial
local
institutions
government

Classification

Financialservices
providersForeign shareholders

Other legal
entities

Other than
individuals

Individuals

Individuals
and other

Status of sharesless than one
unit (shares)

Total

Number ofshareholders
―
77
76
578
1,007
74
36,332
38,144―(persons)
Number ofshares held―
357,819
29,796
46,698678,279357
301,921
1,414,870
182,000(units)Shareholding
―
25.29
2.11
3.30
47.93
0.03
21.34
100.00―
ratio (%)
(Note) 1. Out of treasury shares of 21,543,231 shares, 215,432 units and 31 shares are included in “Individuals and other” and “Status of sharesless than one unit,” respectively.
2. “Other legal entities” includes one unit of shares held in the name of Japan Securities Depository Center, Incorporated.

(6) Status of voting rights(i) Shares issued
As of March 31, 2018
Class

Number of shares (shares)

Number of voting rights(units)Description

―

―

―

―

―

―

―

―

―

―

Number of shares constituting a
unit: 100 shares

Shares without voting rights
Shares with restricted voting rights(treasury shares, etc.)
Shares with restricted voting rights(other)(Treasury shares)

Shares with full voting rights(treasury shares, etc.)

Common shares

21,543,200

Shares with full voting rights (other)

Common shares

119,943,800

Shares less than one unit

Common shares

182,000―

Shares less than one unit (100shares)141,669,000――

Total number of shares issued

1,199,438

Same as the above

Total number of voting rights held by―
1,199,438―
all shareholders(Note) “Shares with full voting rights (other)” includes one hundred shares (one voting right) held in the name of Japan Securities Depository
Center, Incorporated.

(ii) Treasury shares and other relevant matters
As of March 31, 2018
Name of shareholder

Number of shares held Number of shares held
Shareholding ratio over the
Total number of shares
Address of shareholder
under own nameunder another nametotal number of shares
held (shares)(shares)(shares)issued (%)(Treasury shares)
Nintendo Co., Ltd.
Total

11-1 Hokotate-cho,Kamitoba, Minami-ku,
Kyoto 601-8501 Japan

21,543,200―

21,543,200

15.21

―

21,543,200―

21,543,200

15.21- 16 -

2. Status of acquisition of treasury shares and other relevant matters[Class of shares, etc.] Acquisition of common shares under Article 155, item 7 of the Companies Act(1) Status of acquisition based on a resolution approved at the General Meeting of Shareholders
Not applicable(2) Status of acquisition based on a resolution approved by the Board of Directors
Not applicable(3) Description of acquisition of treasury shares not based on a resolution approved at the General Meeting of
Shareholders or a resolution approved by the Board of Directors
Acquisition under Article 155, item 7 of the Companies Act
Classification

Total amount of acquisition price(yen)

Number of shares (shares)

Treasury shares acquired during the fiscal year ended March 31, 2018

1,917

78,287,580

109

5,005,280

Treasury shares acquired during the current period

Classification

Total amount of acquisition price(dollars)

Number of shares (shares)

Treasury shares acquired during the fiscal year ended March 31, 2018
Treasury shares acquired during the current period

1,917

738,562

109

47,219(Note) The number of treasury shares acquired during the current period does not include shares less than one full unit purchased during theperiod from June 1, 2018 to the submission date of this report.

(4) Status of disposition and holding of acquired treasury sharesFiscal year ended March 31, 2018
Classification

Current period

Number of shares(shares)

Total amount ofdisposal price (yen)Number of shares(shares)

Total amount ofdisposal price (yen)Acquired treasury shares for which subscribers
were solicited

―

―

―

―

Acquired treasury shares that was retired

―

―

―

―

―

―

―

―

―

―

21,543,340―

Acquired treasury shares that was transferred inassociation with a merger, share exchange or
corporate split
Other (sold due to demand for sale of sharesconstituting less than one full unit)
Number of treasury shares held

27
21,543,231

314,118―(Note) The number of treasury shares held during the current period does not include shares less than one full unit purchased or sold during theperiod from June 1, 2018 to the submission date of this report.

- 17 -

3. Dividend policy
It is the Company’s basic policy to internally provide the capital necessary to fund future growth, including capital
investments, and to maintain a strong and liquid financial position in preparation for changes in the businessenvironment and intensified competition. As for direct profit returns to our shareholders, dividends are paid basedon profit levels achieved in each fiscal period.
It is the Company’s basic policy to distribute the surplus twice per year in the form of an interim dividend and a
year-end dividend. The Articles of Incorporation of the Company stipulate that the Company “may pay an interim
dividend based on a resolution approved by the Board of Directors” pursuant to the provisions of Article 454, item
5 of the Companies Act. The governing bodies which determine the interim dividend and year-end dividend are theBoard of Directors and the General Meeting of Shareholders, respectively.
The annual dividend per share will be established at the higher of the amount calculated by dividing 33% ofconsolidated operating profit by the total number of outstanding shares, excluding treasury shares, as of the end of
the fiscal year rounded up to the 10 yen digit, and the amount calculated based on the 50% consolidated profit
standard rounded up to the 10 yen digit.
The interim dividend per share is calculated by dividing 33% of consolidated operating profit by the total number ofoutstanding shares, excluding treasury shares, as of the end of the six-month period rounded up to the 10 yen digit.
According to the aforementioned policy, the dividend for the fiscal year ended March 31, 2018, has been
established at 590 yen (interim: 110 yen, year-end: 480 yen).
Retained earnings are maintained for effective use in research of new technology and development of new products
and services, capital investments and securing materials, enhancement of selling power including advertisements,
strengthening of network infrastructure, and treasury share buyback whenever deemed appropriate.
(Note) Dividend payments for which the record date is in the fiscal year ended March 31, 2018 are as follows.
Date of resolution

Total amount of dividend

Dividend per share

Resolved at the meeting of the Board of
Directors on October 30, 2017

¥ 13,213 million¥ 110

Resolved at the Annual General Meetingof Shareholders on June 28, 2018

¥ 57,660 million¥ 480

Date of resolution

Total amount of dividend

Dividend per share

Resolved at the meeting of the Board of
Directors on October 30, 2017

USD 124 million

USD 1.03

Resolved at the Annual General Meetingof Shareholders on June 28, 2018

USD 543 million

USD 4.52- 18 -

4. Members of the Board of Directors
Nine male Directors and zero female Director (percentage of females: 0%)
Position

Job title

Name

Date of birth

Number ofshares held
(hundreds)

Past experience

Term

Joined the Company
Appointed as Outside Director of
The Pokémon Company
July 2015
Appointed as General Manager,
Corporate Planning Department
June 2016
Appointed as Director (to present)
Managing Executive Officer andSupervisor of Corporate Analysis &Administration Division
September 2016 In charge of Global Marketing
Department
June 2018
Appointed as Director and President(to present)
Appointed as Representative
Director (to present)

*1

1

*1

1

*1

1

*1

1

April 1994
May 2012

Representative
Director andPresident

Shuntaro
Furukawa

January 10,
1972

April 1977
June 2000
Representative
Director

Fellow

Shigeru
Miyamoto

November
16, 1952

Joined the Company
Appointed as Director (to present)
General Manager, Entertainment
Analysis & Development Division
May 2002
Appointed as Senior Managing
Director
Appointed as Representative
Director (to present)
September 2015 Appointed as Fellow (to present)
April 1989
July 2012

SeniorManaging
Executive
Officer
Director

GeneralManager,Entertainment
Planning &Development
Division

ShinyaTakahashi

Joined the Company
Deputy General Manager, Software
Planning & Development Division
June 2013
Appointed as Director (to present)
General Manager, Software Planning& Development Division
September 2015 General Manager, Entertainment
Planning & Development Division
November 9,(to present)
1963
Supervisor of Business Development
Division, Development
Administration & Support Division(to present)
June 2016
Appointed as Managing Executive
OfficerJune 2018
Appointed as Senior Managing
Executive Officer (to present)

SeniorExecutive
Officer
Director

GeneralManager,
Platform
Technology
Development
Division

Ko Shiota

August 7,
1969

April 1992
Joined the Company
September 2015 General Manager, Platform
Technology Development Division(to present)
June 2016
Appointed as Executive Officer
June 2017
Appointed as Director (to present)
Appointed as Senior Executive
Officer (to present)- 19 -

Position

Job title

Name

Date of birth

Past experience
April 1985
February 1999

Director

Director as a
Full-time Audit
andSupervisory
Committee
Member

GeneralManager,Marketing
Division andLicensing
Division*1-

Joined the Company
General Manager, Software Planning& Development Administration
Department
Deputy General Manager, Human
Resources Division
Appointed as Director as a Full-time
Audit and Supervisory Committee
Member (to present)*2

1

Registered as attorney-at-law
Registered as patent attorney
Opened Mizutani Law and Patent
OfficeAppointed as Auditor of theCompany
Appointed as Director of theCompany
Appointed as Director as an Audit
and Supervisory Committee Memberof the Company (to present)*2–

Registered as certified public
accountant
July 1999
Opened Umeyama Certified Public
Accountant Office
August 1999
Registered as a certified tax
accountant
October 1999
Opened Umeyama Certified Tax
Accountant Office (current
Umeyama Certified Tax Accountant
LLC)
November 2005 Appointed as Outside Auditor of
KURAUDIA Co., Ltd. (current
KURAUDIA HOLDINGS Co., Ltd.)
July 2009
Appointed as Representative Partnerof Umeyama Certified Tax
Accountant LLC (to present)
June 2012
Appointed as Auditor of theCompany
November 2015 Appointed as Outside Director(Audit and Supervisory Committee
Member), KURAUDIA Co., Ltd.
(current KURAUDIA HOLDINGS
Co., Ltd.) (to present)
June 2016
Appointed as Director as an Audit
and Supervisory Committee Memberof the Company (to present)*2–June 2016
May 2018
SatoruShibata

September 4, June 20181962

June 1980
May 2010
Naoki
NoguchiFebruary 8,
1954

March 2014
June 2016

April 1979
May 1989
June 1989
Director as an
Audit andSupervisory
Committee
MemberNaoki
Mizutani

December
22, 1950

Number ofshares held
(hundreds)

Joined the Company
Appointed as President of Nintendo
Australia Pty Limited
Appointed as President of Nintendoof Europe GmbH
Appointed as Executive Officer
Appointed as Outside Director of
The Pokémon Company (to present)
Appointed as Director (to present)
Appointed as Senior Executive
Officer (to present)
Appointed as General Manager,
Marketing Division (to present)
Appointed as General Manager,
Licensing Division (to present)
In charge of Advertising Department,
Global Marketing Department (topresent)

June 2000
SeniorExecutive
OfficerTerm

June 2003
June 2014
June 2016

March 1994

Director as an
Audit andSupervisory
Committee
MemberKatsuhiro
UmeyamaJuly 29,1965- 20 -

Position

Job title

Name

Date of birth

Past experience

Term

Joined Osaka Regional Taxation
BureauJuly 2010
Appointed as Director, Minato Tax
Office, Osaka Regional Taxation
BureauJuly 2016
Appointed as Director, Higashi Tax
Office, Osaka Regional Taxation
BureauAugust 2017
Registered as certified tax accountant
September 2017 Opened Masao Yamazaki Certified
Tax Accountant Office
June 2018
Appointed as Director as an Audit
and Supervisory Committee Memberof the Company (to present)*2

Number ofshares held
(hundreds)

April 1975

Director as an
Audit andSupervisory
Committee
Member

Masao
YamazakiJune 16,
1956

5

Total

(Notes) 1.
2.

3.
4.

–

Directors, Mr. Naoki Mizutani, Mr. Katsuhiro Umeyama and Mr. Masao Yamazaki are Outside Directors.
*1 The term of office of Directors (excluding those who are Audit and Supervisory Committee Members)commenced upon election at the Annual General Meeting of Shareholders for the fiscal year ended on March 31,
2018, and expires at the close of the Annual General Meeting of Shareholders for the fiscal year ending March 31,
2019.
*2 The term of office of Directors who are Audit and Supervisory Committee Members commenced upon election
at the Annual General Meeting of Shareholders for the fiscal year ended on March 31, 2018 and expires at theclose of the Annual General Meeting of Shareholders for the fiscal year ending March 31, 2020.
The Company has adopted the Executive Officer System since June 29, 2016 for the purpose of clarifying the
responsibility for the execution of operations and establishing a more flexible management structure which canappropriately and swiftly respond to the rapidly changing business environment through the separation of the
management decision-making and supervisory functions from the execution of operations, as well as byaccelerating the delegation of authority to execute operations. Seven executive officers, excluding those who havethe concurrent position as Director, are as follows.
Title

Name

Senior Executive Officer
General Manager, General Affairs Division
In charge of Quality Assurance Department, Investor
Relations
Senior Executive Officer
President, Nintendo Sales Co., Ltd.
Senior Executive Officer
General Manager, Manufacturing Division
Executive Officer
President, Nintendo of America Inc.
Executive Officer
Deputy General Manager, Entertainment Planning &Development Division
Executive Officer
Senior Officer, Entertainment Planning & Development
Division
Executive Officer
General Manager, Finance Administration Division,
Finance Department and Payment Services Management
Department- 21 -

Shigeyuki Takahashi
Satoshi Yamato
Hirokazu Shinshi
Reginald Fils-Aime
Yoshiaki Koizumi
Takashi Tezuka

Hajime Murakami

5. Corporate governance<Principles concerning corporate governance>
At Nintendo, we strive to maximize long-term corporate value while carefully considering the benefits foreveryone we touch. We are working to achieve a highly transparent and sound system of corporate
governance; we also educate our employees about our policies, including good corporate ethics.
(1) Outline of corporate governance system
For the purpose of strengthening the supervisory function of the Board of Directors, and further promoting
corporate governance, Nintendo Co., Ltd. adopts the governance structure of a Company with Audit andSupervisory Committee. Furthermore, the Company has introduced the Executive Officer System for the
purpose of clarifying the responsibility for the execution of operations, and establishing a more flexible
management structure which can appropriately and swiftly respond to the rapidly changing businessenvironment. The foregoing will be enabled through separating the management decision-making andsupervisory functions from the execution of operations as well as by accelerating the delegation of authority to
execute operations.
The Board of Directors consists of five Directors (excluding Directors who are Audit and Supervisory
Committee Members) and four Directors who are Audit and Supervisory Committee Members (including
three Outside Directors). The term of office of Directors (excluding Directors who are Audit and Supervisory
Committee Members) is one year and the term of office of Directors who are Audit and Supervisory
Committee Members is two years.
In addition to the meetings of the Board of Directors, which are generally held monthly, Nintendo Co., Ltd.
also holds meetings of the Executive Management Committee consisting of the Directors (excluding Directors
who are Audit and Supervisory Committee Members) twice a month as a general rule, in order to strongly
drive management activities and thereby ensure prompt and efficient decision-making. Furthermore, NintendoCo., Ltd. maintains a system where executive officers appointed by the Board of Directors every year performtheir respective duties under the President’s supervision and instructions.
The Audit and Supervisory Committee consists of one full-time Internal Director and three Outside
Directors; all of the Outside Directors are designated as independent officers. The Audit and Supervisory
Committee Members attend meetings of the Board of Directors and other important meetings, inspect
important documents, have regular meetings with the President and hold monthly meetings of the Audit andSupervisory Committee as a general rule to share audit opinions. Furthermore, the full-time Audit andSupervisory Committee Member conducts fieldwork auditing over each division of the Company, etc., basedon the annual audit plan.
With respect to internal auditing, the Internal Auditing Department, under the direct supervision of the
President, conducts internal auditing from a fair and unbiased perspective independent from business divisions,and works on the promotion and improvement of internal control including subsidiaries and associates.
Accounting Auditor maintains close coordination with the Audit and Supervisory Committee, as well as theInternal Auditing Department, regarding accounting auditing, including the report on the audit plan and audit
results, as well as information and opinion exchanges as necessary even during the period, in order to ensure
effective and efficient auditing.

- 22 -

Reference: Corporate Governance System(Board of Directors)
The Board of Directors consists of five Directors (excluding Directors who are Audit and Supervisory Committee
Members) and four Directors who are Audit and Supervisory Committee Members (including three Outside
Directors). The term of office of Directors (excluding Directors who are Audit and Supervisory Committee
Members) and Directors who are Audit and Supervisory Committee Members is one year and two years,
respectively.
(Audit and Supervisory Committee)
The Audit and Supervisory Committee consists of one full-time internal Director and three Outside Directors, all ofwhom are designated as independent officers.
(Audit and Supervisory Committee Office)
The Company has established the Audit and Supervisory Committee Office which assists the Audit and Supervisory
Committee in performing its duties.
(Executive Management Committee)
With the aim of promoting corporate activities strongly, the Company holds the Executive Management Committee
meetings attended by Directors (excluding Directors who are Audit and Supervisory Committee Members) twice
per month in principle and makes speedy and efficient decisions.
(Compliance Committee)
The Company has established the Compliance Committee chaired by General Manager of General Affairs Division
to perform initiatives for promotion of compliance including establishment of the “Compliance Manual.”- 23 -

(i) Compensation for officers, etc.

(a) Total amount of compensation, etc. by officer classification, total amount of compensation by type, andnumber of eligible officers at the reporting company
Total amount ofcompensation, etc.
(Millions of yen)

Officer classification
Directors who are not Audit andSupervisory Committee Members(excluding Outside Directors)
Directors who are Audit andSupervisory Committee Members(excluding Outside Directors)
Outside Officers

Officer classification

Total amount of compensation, etc. by type(Millions of yen)
Number of eligible
officers (persons)Base
Variable
Other
compensation compensation compensation

504

193

310

―

6

32

32

―

―

1

28

28

―

―

3

Total amount of Total amount of compensation, etc. by type(Millions of dollars)compensation, etc.
Number of eligible(Millions ofofficers (persons)Base
VariableOther
dollars)
compensation compensation compensation

Directors who are not Audit andSupervisory Committee Members
4
1
2
―
6
(excluding Outside Directors)
Directors who are Audit andSupervisory Committee Members
0
0
―
―
1
(excluding Outside Directors)
Outside Officers
0
0
―
―
3
(Note)
Employee salaries (including bonuses) paid to Directors who also serve as employees, which amounted to ¥92
million (USD 0 million), are not included in the above amounts.

(b) Total amount, etc. of compensation on a consolidated basis, etc. by officer at the reporting company

Name

TatsumiKimishima
Shigeru
Miyamoto

Name

TatsumiKimishima
Shigeru
Miyamoto

Total amount ofcompensation on a
Officer classification
consolidated basis, etc.
(Millions of yen)
Director who is not an
Audit and Supervisory
205 Committee Member

141

Amount of compensation on a consolidated
basis, etc. by type (Millions of yen)
Base
Variable
Other
compensation compensation compensation

Reportingcompany

76

106

―

Director

Nintendo ofAmerica Inc.

22

―

―

Director who is not an
Audit and Supervisory
Committee Member

Reportingcompany

70

71―

Total amount ofcompensation on a
Officer classification
consolidated basis, etc.
(Millions of dollars)
Director who is not an
Audit and Supervisory
1 Committee Member

1Companyclassification

Companyclassification

Amount of compensation on a consolidated
basis, etc. by type (Millions of dollars)
Base
Variable
Other
compensation compensation compensation

Reportingcompany01―

Director

Nintendo ofAmerica Inc.

0

―

―

Director who is not an
Audit and Supervisory
Committee Member

Reportingcompany00―- 24 -

(c) Policy, etc. for the determination of compensation, etc. for officers

In regards to the compensation for Directors of the Company, upper limits on the total compensation for
Directors who are not Audit and Supervisory Committee Members and that for Directors who are Audit andSupervisory Committee Members are determined separately by resolution of the General Meeting of
Shareholders.
Compensation for Directors who are not Audit and Supervisory Committee Members consists of: basecompensation, which is fixed compensation (salary paid in the same amount periodically); and variable
compensation, which is linked to performance (salary linked to profit). Fixed compensation is paid inaccordance with the respective positions and responsibilities of Directors, whereas variable compensation ispaid for the purpose of raising incentives for higher performance, using consolidated operating profit as abenchmark.
Compensation for Directors who are Audit and Supervisory Committee Members consists only of fixedcompensation in view of the fact that they are in an independent position that is not affected by other Directors
who execute operations.
(Note) Variable compensation for each Director who is not an Audit and Supervisory Committee Member iscalculated using the prescribed formula based on points corresponding to his/her position as follows.
Calculation method of variable compensation for Directors who are not Audit and Supervisory
Committee Members (“Directors”)
Variable compensation = Consolidated operating profit × 0.2% × Number of points of each Director ÷
Sum total of Directors’ points** The sum total of Directors’ points shall be set at 20.0 (fixed) if it falls short of 20.0.
Director’s points by position and number of Directors
Position

PointsNumber of Directors (persons)Total points

Representative Director and President

6.0

1

6.0

Representative Director and Fellow

4.0

1

4.0

Director and Senior Managing Executive Officer

4.0

1

4.0

Director and Managing Executive Officer

3.0

0

0.0

Director and Senior Executive Officer

1.5

2

3.0

5

17.0

Sum total―(Note) The above is calculated based on the number of Directors as of June 29, 2018.

Matters of note・ Directors refer to executive officers set forth in Article 34, paragraph (1), item (iii) of the Corporation
Tax Act.
・ “Indicator of the status of profit in the business year ending on or after the first day of the period inwhich duties pertaining to such remuneration are performed” provided for in Article 34, paragraph (1),item (iii)(a) of the Corporation Tax Act shall mean consolidated operating profit.
・ The amount of consolidated operating profit shall be rounded down to the nearest hundred million yen.
・ “Determined amount” provided for in Article 34, paragraph (1), item (iii)(a)1. of the Corporation Tax Act
shall be limited to ¥600 million. In cases where the amount calculated by multiplying consolidated
operating profit by 0.2% exceeds ¥600 million, the amount shall be ¥600 million.
・ If a Director has resigned before the expiry of his/her term of office due to unavoidable circumstances,
the amount corresponding to the number of months he/she was in office from the time of commencementof such period up to the end of the period (number of days falling short of one month shall be rounded up
to one month) shall be paid. Of note, the amount shall not be prorated with respect to the number ofmonths in cases where a Director resigns after the end of the period.

- 25 -

(ii) Shareholding status(a) Investment securities held for purposes other than pure investment
Number of issues
34 issues
Total amount stated on balance sheet
54,355 million yen (USD 512 million)(b) Shareholding classification, issue, number of shares, balance sheet amount and shareholding purpose ofinvestment shares held for purposes other than pure investment(Fiscal year ended March 31, 2018)
Specific investment shares
Issue

Number ofshares(Shares)

Balance sheet
Balance sheet
amountamount(Millions of(Millions of yen)dollars)

DeNA Co., Ltd.

15,081,000

28,955273

BANDAI NAMCO Holdings
Inc.

3,845,700

13,440126

908,4595,396

50

2,455,870

1,711

16

612,200678

6

91,252444

4647,469363

363,734356

3365,770319

3

104,104297

2

The Bank of Kyoto, Ltd.
Mitsubishi UFJ Financial
Group, Inc.
KADOKAWA DWANGOCORPORATIONSQUARE ENIX HOLDINGS
CO., LTD.
Resona Holdings, Inc.
KONAMI HOLDINGSCORPORATIONTOPPAN PRINTING CO.,LTD.
Nissha Co., Ltd.
Sumitomo Mitsui TrustHoldings, Inc.
Shirai Electronics IndustrialCo., Ltd.
SANSHIN ELECTRONICS
CO., LTD.

60,920262

2336,000

188

1

50,180109

1Mizuho Financial Group, Inc.

284,21954

011,355

48

0

8,849

39

0

15,79432

0

10,00027

010,5005

0JAPAN PULP AND PAPER
COMPANY LIMITED
Sumitomo Mitsui Financial
Group, Inc.
KOEI TECMO HOLDINGS
CO., LTD.
TV TOKYO Holdings
Corporation
THE SHIGA BANK, LTD．

(c) Investment shares held for the purpose of pure investment
There are no applicable shares.

- 26 -

Shareholding purpose
Shares are held for the purpose of maintaining
and developing the business relationship.
Shares are held for the purpose of maintaining
and developing the business relationship.
Shares are held for the purpose of maintaining
and developing the business relationship.
Shares are held for the purpose of maintaining
and developing the business relationship.
Shares are held for the purpose of maintaining
and developing the business relationship.
Shares are held for the purpose of maintaining
and developing the business relationship.
Shares are held for the purpose of maintaining
and developing the business relationship.
Shares are held for the purpose of maintaining
and developing the business relationship.
Shares are held for the purpose of maintaining
and developing the business relationship.
Shares are held for the purpose of maintaining
and developing the business relationship.
Shares are held for the purpose of maintaining
and developing the business relationship.
Shares are held for the purpose of maintaining
and developing the business relationship.
Shares are held for the purpose of maintaining
and developing the business relationship.
Shares are held for the purpose of maintaining
and developing the business relationship.
Shares are held for the purpose of maintaining
and developing the business relationship.
Shares are held for the purpose of maintaining
and developing the business relationship.
Shares are held for the purpose of maintaining
and developing the business relationship.
Shares are held for the purpose of maintaining
and developing the business relationship.
Shares are held for the purpose of maintaining
and developing the business relationship.

(2) Company’s systems and policies< System to ensure proper business execution >1) System to ensure that the Company’s Directors and employees execute their duties in compliance withthe laws and regulations and the Articles of Incorporation
By establishing an Audit and Supervisory Committee, which consists of a majority of Outside
Directors, the Company aims to strengthen the supervisory functions of the Board of Directors andfurther promote corporate governance of the Company. Furthermore, the Company has established acompliance program (legal risk management policy) to define normative systems for compliance andhas designed a compliance manual and otherwise implemented measures for promotion of compliancethrough establishment of a Compliance Committee in order to ensure that Directors’ and employees’
execution of duties complies with the laws and regulations and the Articles of Incorporation. In addition,
the Company has established a whistleblowing policy (“Compliance Hotline”) for early discovery andcorrection of illegal conduct.
In addition to regular audits by the Audit and Supervisory Committee, the Internal Auditing
Department, under the direct supervision of the President, regularly evaluates whether the operation ofinternal controls and financial reporting process of each division and department are appropriate andeffective through internal audits, and proposes and suggests measures to make improvements, etc.
The Company has a system to deal with antisocial forces that threaten social order and security at thecompany level, having appointed a responsible division for dealing with antisocial forces based on its
commitment to taking a tough stance against such forces. The Company has also built a system tocollaborate with police, attorneys and other outside expert organizations during ordinary times toprepare for emergencies.

2) System for storage and management of information related to the execution of duties of the Company’s
Directors
The Company records information related to Directors’ execution of duties as minutes of meetings ofthe Board of Directors, Executive Management Committee and other important meetings, as well as
documents such as action memos (including electronic records). Each such record is stored and managed
for an appropriate retention period, respectively, based on internal regulations.
3) Regulations or any other systems of the Company for management of risk of loss
As a general rule, each division and department manages risks pertaining to work within its
jurisdiction. Furthermore, the Internal Auditing Department monitors the risk management system of
each division and department, and proposes and advises on policies for improvement, etc. Further, under
the Compliance Committee, thorough compliance efforts are promoted at each division and department.
In addition, the Company has established a Product Safety Committee and other structures to guarantee
product safety, prevent the occurrence of product accidents and ensure prompt response in the event of an
accident.
4) System to ensure that the execution of duties of the Company’s Directors is efficient
In addition to the meetings of the Board of Directors held monthly as a general rule, meetings of the
Executive Management Committee, which consists of Directors (excluding Audit and Supervisory
Committee Members), are held twice a month generally at the Company, to make prompt and efficientdecisions. Furthermore, the Company has introduced the Executive Officer System for the purpose ofclarifying the responsibility for the execution of operations through the separation of the management
decision-making and supervisory functions from the execution of operations, as well as by accelerating
the delegation of authority to execute operations.
With regards to the execution of operations, internal regulations set forth the allocation of duties andauthorities to ensure organized and efficient operation of business.
5) System to ensure proper business execution within the Company group
The system seeks to ensure proper business execution within the Company group as a whole byensuring proper business execution by each subsidiary.
The Company has established internal regulations applicable to its subsidiaries mainly to ensure
efficient risk management and business operation by the subsidiaries. Pursuant to the regulations, theresponsible divisions and departments of the Company identify and manage such matters as the
management status of the respective subsidiaries they are in charge of, obtaining information therefrom
as necessary, and subsidiaries are required to obtain the Company’s prior approval for significant
matters.
- 27 -

Furthermore, in addition to audits by the Company’s Accounting Auditor, the Audit and Supervisory
Committee also conducts audits with respect to subsidiaries as necessary. The Internal Auditing
Department likewise conducts audits with respect to subsidiaries as needed in addition to providing
guidance and cooperation on internal controls. Major subsidiaries have established internal auditing
divisions or departments, and each subsidiary is promoting the establishment of internal control systems
suitable to the size of the subsidiary and the law in the region where the subsidiary is located, with thecooperation of relevant divisions and departments of the Company.
In addition to providing guidance and cooperation on compliance to each subsidiary as needed, theCompany has established a whistleblowing system at major subsidiaries to render it possible to provide
information directly to the Company in order to enhance and promote the compliance of the Company
group as a whole. Under the umbrella of the Global Compliance Conference, which comprises top
management and other members of the Company and its major subsidiaries, the person in charge ofcompliance at each company regularly holds meetings.

6) System to ensure that the execution of duties of the Company’s Audit and Supervisory Committee is
effective
・ Matters related to employees to assist duties of the Company’s Audit and Supervisory Committee
The Company has established a special organization, the Audit and Supervisory Committee Office,to assist the duties of the Audit and Supervisory Committee, and the Office has dedicated staff
members who work to assist the duties of the Audit and Supervisory Committee under the direction of
the Committee.
Employees in the Audit and Supervisory Committee Office are selected and transferred with theagreement of the Audit and Supervisory Committee to ensure independence of such employees andeffectiveness of the direction of the Committee to such employees.
・System for reporting to the Company’s Audit and Supervisory Committee
The President of the Company regularly holds meetings with the Company’s Audit and Supervisory
Committee Members, and provides timely reports regarding the matters designated by law. The
Company’s Internal Auditing Department reports internal audit results to the Company’s Audit andSupervisory Committee in a timely manner and, furthermore, the Company’s Directors and other
employees report to the Audit and Supervisory Committee as needed matters reported by a Director or
another employee of a subsidiary or matters concerning execution of the Company’s or a subsidiary’s
business.
An employee who reports to the Company’s Audit and Supervisory Committee will not be treatedunfavorably.
・Other systems to ensure that audits by the Company’s Audit and Supervisory Committee are effective
The Company’s Audit and Supervisory Committee Members attend the meetings of the Board of
Directors as well as participate in important committees and meetings that are deemed necessary inorder to ensure that the audits conducted are effective. In the event that an Audit and Supervisory
Committee Member requests the payment of costs and expenses in connection with the performanceof his/her duties, the request is processed pursuant to relevant laws in accordance with internal
regulations.
7) System to ensure fairness and reliability of financial reporting
In order to ensure the fairness and reliability of financial reporting, the Company implements internal
controls for financial reporting which it has developed in an appropriate manner in compliance withlaws and regulations such as the Financial Instruments and Exchange Act. The Company also assesses
implementation of these internal controls, checks their validity on an ongoing basis and takes necessary
measures to improve them.

- 28 -

V. Financial Information
Consolidated financial statements, etc.
(1) Consolidated financial statements(i) Consolidated balance sheets
Previous fiscal year
(As of March 31, 2017)

Current fiscal year
(As of March 31, 2018)(Millions of yen)

(Millions of yen)

(Millions ofdollars)

662,763
106,054283,307
39,129332
49,535(379)
1,140,742

744,555
69,829243,431
141,795
10,834
66,405(87)
1,276,764

7,024
658
2,296
1,337
102
626
(0)
12,04436,094
1,450
3,915
41,812653
83,926

340
13
36
394
6
791

11,4872,533
14,020108
23132

198,538
37,094
7,931
15,503
(30)

1,873
349
74
146
(0)

259,037
356,984
1,633,748

2,443
3,367
15,412

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Securities
Inventories
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Tools, furniture and fixtures, net
LandConstruction in progress
Total property, plant and equipment*1*2

Intangible assets
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Net defined benefit asset
Other
Allowance for doubtful accounts

38,707
1,400
4,313
42,133
3
86,558

*1

*2

9,942
2,882
12,825*3

Total investments and other assets
Total non-current assets
Total assets

157,963
49,4537,680
13,753(0)228,851
328,235
1,468,978- 29 -*3

Previous fiscal year
(As of March 31, 2017)

Current fiscal year
(As of March 31, 2018)(Millions of yen)

(Millions of yen)

(Millions ofdollars)

104,181
11,2672,341
66,319184,109

138,015
43,3903,217
93,452
278,076

1,302
409
30
881
2,623

19,245
14,65033,895
218,005

16,60915,48732,097
310,173

156
146
302
2,926

10,065
13,256
1,489,518(250,601)

10,065
13,742
1,564,240(250,679)

94
129
14,756(2,364)

1,262,239

1,337,369

12,616

18,913(30,312)(11,399)132

16,402(34,736)(18,334)
4,540

154
(327)
(172)
42

1,250,972
1,468,9781,323,574
1,633,748

12,486
15,412

Liabilities
Current liabilities
Notes and accounts payable - trade
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets- 30 -

(ii) Consolidated statements of income and consolidated statements of comprehensive income
Consolidated statements of income
Previous fiscal year
(From April 1, 2016
to March 31, 2017)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Share of profit of entities accounted for using equity
methodOther
Total non-operating income
Non-operating expenses
Sales discounts
Loss on redemption of securities
Foreign exchange losses
Other
Total non-operating expenses(Millions of yen)
489,095*1, *3
290,197
198,898*2, *3
169,535
29,362

Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Reversal of loss on litigation
Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets
Loss on sales of investment securities
Restructuring loss
Loss on litigation

Current fiscal year
(From April 1, 2017
to March 31, 2018)(Millions of(Millions of yen)dollars)
1,055,682
9,959*1, *3652,141
6,152
403,540
3,806*2, *3225,983
2,131
177,557
1,675

6,237

9,064

85

20,271
2,083
28,593

10,318
4,126
23,509

97
38
221

3
2,199
5,256
131
7,591

―
794
766
150
1,710

―
7
7
1
16

50,364

199,356

1,880

*4

185
64,589―64,775

*4

821
490
1,929
3,240

7
4
18
30

*5

328
―
80
―

*5

366
2
―
1,138

3
0
―
10

*6

Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred409
114,730
25,331(13,183)

1,507
201,090
56,977
3,167

14
1,897
537
29

Total income taxes

12,14760,144

567

ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

102,5828
102,574

140,945
1,354
139,590

1,329
12
1,316

- 31 -

Consolidated statements of comprehensive income
Previous fiscal year
(From April 1, 2016
to March 31, 2017)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests(Millions of yen)
102,582

Current fiscal year
(From April 1, 2017
to March 31, 2018)(Millions of(Millions of yen)dollars)
140,945
1,329

7,147
(5,916)*1- 32 -(2,490)(4,028)

(23)
(38)

(336)
(6,855)134,090

(3)
(64)
1,265

104,517

132,655

1,251

8

1,434

13

711
1,942
104,525*1

(iii) Consolidated statements of changes in equity
Previous fiscal year (from April 1, 2016 to March 31, 2017)(Millions of yen)
Shareholders’ equity
Capital stock
Balance at beginning of current
periodCapital surplus

10,065Retained earnings

13,2561,401,359

Total shareholders’equityTreasury shares(250,563)

1,174,118

Changes of items during period
Dividends of surplus(14,415)(14,415)

Profit attributable to ownersof parent

102,574

102,574

Purchase of treasury shares

(38)

(38)

Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current period––

88,159(38)

88,121

10,065

13,256

1,489,518(250,601)

1,262,239

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities
Balance at beginning of current
period11,909Foreign currencytranslation
adjustment(25,250)

Total accumulated
othercomprehensive
incomeNon-controllinginterests(13,341)

124

Total net assets

1,160,901

Changes of items during period
Dividends of surplus(14,415)

Profit attributable to ownersof parent

102,574

Purchase of treasury shares(38)

Disposal of treasury shares–

Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current period

7,004(5,061)

1,942

8

1,950

7,004

(5,061)1,942

8

90,071

18,913(30,312)(11,399)132

1,250,972- 33 -

Current fiscal year (from April 1, 2017 to March 31, 2018)(Millions of yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Changes of items during
periodCapital surplus

10,065Retained earnings

13,256

1,489,518

Dividends of surplus
Profit attributable toowners of parent

Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period(250,601)

Total shareholders’equity1,262,239(64,868)(64,868)

139,590

139,590

Purchase of treasury shares
Disposal of treasury shares

Treasury shares

485(1,903)(1,903)

1,825

2,311

―

485

74,722(77)

75,12910,065

13,742

1,564,240(250,679)

1,337,369

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities
Balance at beginning ofcurrent period
Changes of items during
period18,913Foreign currencytranslation
adjustment(30,312)

Total accumulated
othercomprehensive
income(11,399)

Non-controllinginterests

132

Dividends of surplus

1,250,972(64,868)

Profit attributable toowners of parent

139,590

Purchase of treasury shares(1,903)

Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
periodTotal net assets

2,311(2,510)(4,424)(6,935)

4,407(2,527)(2,510)(4,424)(6,935)

4,407

72,602

16,402(34,736)(18,334)

4,540

1,323,574- 34 -

Current fiscal year (from April 1, 2017 to March 31, 2018)(Millions of dollars)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Changes of items during
periodCapital surplus
94

Retained earnings

125

14,052

Total shareholders’equityTreasury shares(2,364)

11,907

Dividends of surplus

(611)

(611)

Profit attributable toowners of parent

1,316

1,316

Purchase of treasury shares
Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period

4

(17)

(17)

17

21

–

4

704

(0)

708

94

129

14,756(2,364)

12,616

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities
Balance at beginning ofcurrent period
Changes of items during
period178

Foreign currencytranslation
adjustment(285)

Total accumulated
othercomprehensive
income(107)

Non-controllinginterests

Total net assets

1

11,801Dividends of surplus(611)

Profit attributable toowners of parent

1,316

Purchase of treasury shares(17)

Disposal of treasury shares

21

Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
period

(23)

(41)

(65)

41

(23)

(23)

(41)

(65)

41

684

154

(327)

(172)

42

12,486- 35 -

(iv) Consolidated statements of cash flows
Previous fiscal year
(From April 1, 2016
to March 31, 2017)(Millions of yen)
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in net defined benefit liability
Interest and dividend income
Foreign exchange losses (gains)
Loss (gain) on sales of short-term and long-term
investment securities
Share of loss (profit) of entities accounted for using
equity method
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in accrued consumption taxes
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment and intangible
assetsProceeds from sales of property, plant and equipment andintangible assets
Purchase of short-term and long-term investment
securities
Proceeds from sales and redemption of short-term andlong-term investment securities
Proceeds from purchase of shares of subsidiaries
resulting in change in scope of consolidation
Other, net
Net cash provided by (used in) investing activities

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 36 -

114,7308,366
23(4,053)(6,904)
6,066

201,090
9,064(513)(2,125)(10,116)
6,434

1,897
85
(4)
(20)
(95)
60

(64,617)

(411)

(3)

(20,271)(10,318)(97)(65,706)(155)
51,5281,212
9,231

51,585(107,454)
9,368
(354)
22,650486(1,013)88(3)213

29,4516,332(1)(16,680)
19,101

168,901
10,585(10)(27,267)
152,208

1,593
99
(0)
(257)
1,435

(537,674)
500,936(534,832)
590,660(5,045)
5,572(10,458)(9,609)

(90)

544

984

9

(680,408)(552,785)(5,214)

804,571

567,484

5,353

2,735
(3,251)
61,387

25
(30)
579

(14,384)(38)(64,829)
(78)

(611)
(0)

―
(12)
(14,435)

3,609
(13)
(61,311)

34
(0)
(578)

(1,306)72,878258,095
330,974

1,222
153,506
330,974
484,480

11
1,448
3,122
4,570

―
(7,992)69,518Cash flows from financing activities
Cash dividends paid
Purchase of treasury shares
Proceeds from sales of shares of parent held bysubsidiaries
Other, net
Net cash provided by (used in) financing activities*1

Current fiscal year
(From April 1, 2017
to March 31, 2018)(Millions of(Millions of yen)dollars)*2*1

Notes to Consolidated Financial Statements
Significant matters forming the basis of preparing the consolidated financial statements
1. Scope of consolidation(1)

Number of consolidated subsidiaries: 25 companies
The names of significant consolidated subsidiaries are omitted because they are provided in “I. Overview of
the Company, 3. Subsidiaries and associates.”
Nintendo Network Services Inc. was excluded from the scope of consolidation from the consolidated fiscal
year ended March 31, 2018, since its liquidation had been completed. Nintendo Sales Co., Ltd. was includedin the scope of consolidation from the consolidated fiscal year ended March 31, 2018 following theacquisition of its shares.

(2)

The unconsolidated subsidiary is as follows:
Fukuei Co., Ltd.
The above is unconsolidated because it is a small-scale company and does not have a material impact on the
consolidated financial statements with respect to total assets, net sales, profit or loss, retained earnings, etc.

2. Application of the equity method(1)

Number of associates accounted for under the equity method: following four companies
Name of associates accounted for under the equity method
The Pokémon Company, WARPSTAR, Inc., PUX Corporation, and First Avenue Entertainment, LLLP

(2) The company among the unconsolidated subsidiaries not accounted for under the equity method is Fukuei Co.,
Ltd., and the company among the associates not accounted for under the equity method is Ape Inc. This isbecause the impact each of said companies has on profit or loss, retained earnings, etc., is negligible, and it isimmaterial as a whole.
(3)

With respect to associates accounted for under the equity method whose account closing dates differ from theconsolidated account closing date, the financial statements of each of the companies, either based on theirfiscal year or based on provisional accounts closing, are incorporated.

3. Year-ends of consolidated subsidiaries
Of consolidated subsidiaries, Nintendo Phuten Co., Ltd., iQue (China) Ltd., Nintendo RU LLC. and two othersubsidiaries close accounts on December 31 every year.
As the difference between closing dates is within three months, the above subsidiaries were accounted for based on
the financial statements as of the account closing date of each subsidiary. Necessary adjustments were made to theconsolidated financial statements to reflect any significant transactions that took place between their accountclosing dates and the consolidated account closing date.
4. Accounting procedures(1) Valuation basis and method for important assets(i) Securities
For held-to-maturity debt securities, the amortized cost method (straight-line method) is used. For othersecurities with market quotations, the market price method based on the market price, etc., on the accountclosing date is used (valuation difference is reported as a component of net assets and the cost of sales iscalculated using the moving average method), and securities without market quotations are stated at costusing the moving-average method.
(ii)

Derivatives
The fair value method is applied.

(iii) Inventories
They are mainly stated at cost using the moving-average method (the figures shown in the balance sheets
have been calculated by writing them down based on decline in profitability).

- 37 -

(2) Depreciation and amortization methods of significant depreciable and amortizable assets(i) Property, plant and equipment (excluding leased assets):
The Company and its domestic consolidated subsidiaries apply the declining balance method, but certain
tools, furniture and fixtures are subject to depreciation based on their useful lives in line with theircommercial obsolescence. However, the straight-line method is applied for buildings, except foraccompanying facilities, acquired on April 1, 1998 or thereafter and for facilities attached to buildings andstructures acquired on April 1, 2016, and thereafter. Overseas consolidated subsidiaries apply thestraight-line method based on the estimated economic useful lives.
Useful lives of main assets are as follows:
Buildings and structures(ii)

3-60 years

Intangible assets (excluding leased assets):
Intangible assets are amortized using the straight-line method. Software for internal use is amortized overthe estimated internal useful life (principally five years).

(iii) Leased assets
Leased assets in finance lease transactions that do not transfer ownership
The straight-line method with no residual value is applied, regarding the lease term as useful life.
(3) Accounting for significant reserves(i) Allowance for doubtful accounts
The Company and its domestic consolidated subsidiaries provide the allowance for doubtful accounts
based on the historical analysis of loss experience for general receivables and on individual evaluations of
uncollectible amounts for specific receivables including doubtful accounts. Overseas consolidated
subsidiaries provide the allowance for doubtful accounts based on the individual evaluation of uncollectible
amount for each of receivables.
(ii)

Provision for bonuses
The Company and certain consolidated subsidiaries provide the reserve for the estimated amount ofbonuses to be paid to the employees.

(4) Accounting method for retirement benefit liability(i) Periodic allocation method for estimated benefit obligation
Upon calculating the retirement benefit obligations, the estimated benefit obligation is attributed to periods
up until the end of the fiscal year ended March 31, 2018, on a benefit formula basis.
(ii)

Amortization method for actuarial gains and losses and past service cost
Actuarial gains and losses and past service cost are processed collectively in the year in which they are
incurred.

(iii) Application of simple method at small enterprises, etc.
Some consolidated subsidiaries apply a simple method including a method in which an estimated amountrequired to be paid for voluntary retirement benefits at the end of the fiscal year is deemed as the retirement
benefit obligations in the calculations of net defined benefit liability and retirement benefit expenses.
Assets in the Company’s defined benefit corporate pension plan are recorded as “Net defined benefit asset”
under investments and other assets as the plan assets exceeded the retirement benefit obligations.
(5)Standards of translation into yen of significant assets or liabilities denominated in foreign currencies
All the monetary receivables and payables of the Company and its domestic consolidated subsidiaries
denominated in foreign currencies are translated into Japanese yen based on the spot rate of exchange in theforeign exchange market on the respective account closing dates. The foreign exchange gains and losses fromtranslation are recognized in the accompanying consolidated statements of income. Assets or liabilities ofoverseas consolidated subsidiaries, etc. are translated into yen based on the spot rate of exchange in theforeign exchange market on the account closing date, while revenue and expenses are translated into yen
based on the average rate of exchange for the fiscal year. The differences resulting from such translations areincluded in “Foreign currency translation adjustment” under net assets.

(6) Scope of cash and cash equivalents in the consolidated statements of cash flow
“Cash and cash equivalents” include cash on hand, time deposit which can be withdrawn on demand and- 38 -

short-term investments, with little risk of fluctuation in value and maturity of three months or less of theacquisition date, which are promptly convertible to cash.
(7)

Other important matters in preparing the consolidated financial statements
Accounting for consumption taxes
Consumption taxes and local consumption taxes are accounted for by the tax exclusion method.

(Accounting standards, etc. yet to be applied)・ Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 30, 2018)
・ Implementation Guidance on Accounting Standard for Revenue Recognition (ASBJ Guidance No. 30,
March 30, 2018)(1) Description
This is a comprehensive accounting standard for revenue recognition. Revenue will be recognized by applying
the following five steps.
Step 1: Identify the contract with a customer.
Step 2: Identify the performance obligations within the contract.
Step 3: Calculate the transaction price.
Step 4: Allocate the transaction price to the contractual performance obligations.
Step 5: Recognize revenue when the performance obligations have been fulfilled or as the performanceobligations are fulfilled over time.
(2) Scheduled application date
The Accounting Standard and Implementation Guidance are scheduled to be applied from the beginning of the
fiscal year ending March 31, 2022.
(3) Effect of application of Accounting Standard and Implementation Guidance
The amount of impact is being evaluated at the time of preparation of these consolidated financial statements.

- 39 -

Notes to consolidated balance sheets*1.

Inventories as of March 31, 2017 and 2018 were as follows:

Finished goods
Work in process
Raw materials and supplies*2.

Current fiscal year
(As of March 31, 2018)¥ 129,483 million
USD 1,221 million
63
0¥ 12,248 million
USD 115 million

Accumulated depreciation of property, plant and equipment as of March 31, 2017 and 2018 were as
follows:

Accumulated depreciation*3.

Previous fiscal year
(As of March 31, 2017)¥ 35,824 million
117¥
3,187 million

Previous fiscal year
(As of March 31, 2017)¥ 67,257 million¥

Current fiscal year
(As of March 31, 2018)
68,609 million
USD 647 million

Investments in unconsolidated subsidiaries and associates as of March 31, 2017 and 2018 were as
follows:

Investment securities

Previous fiscal year
(As of March 31, 2017)¥ 25,264 million- 40 -¥

Current fiscal year
(As of March 31, 2018)34,219 million
USD 322 million

Notes to consolidated statements of income*1.

The ending inventory balance is the amount after write-down of book value due to decline inprofitability, and the loss on valuation of inventories included in cost of sales for the years ended March
31, 2017 and 2018 were as follows:
Previous fiscal year
(From April 1, 2016
to March 31, 2017)¥
3,142 million

Loss on valuation of inventories*2.

The major items of selling, general and administrative expenses for the years ended March 31, 2017 and2018 were as follows:

Advertising expenses
Research and development expenses
Salaries, allowances and bonuses
Depreciation
Retirement benefit expenses
Provision for bonuses
Provision of allowance for doubtful accounts

*3.

¥

¥

Previous fiscal year
(From April 1, 2016
to March 31, 2017)¥ 59,197 million

Current fiscal year
(From April 1, 2017
to March 31, 2018)
72,616 million
USD 685 million
63,999603
24,993
235
5,146
48
3,692
34
1,178
11
(5) million
USD (0) million¥

Current fiscal year
(From April 1, 2017
to March 31, 2018)
64,032 million
USD 604 million

Gain on sales of non-current assets for the years ended March 31, 2017 and 2018 were as follows:

Previous fiscal year
(From April 1, 2016
to March 31, 2017)Land¥ 175 million
Machinery, equipment and6
vehiclesTools, furniture and4
fixturesTotal¥ 185 million*5.

Previous fiscal year
(From April 1, 2016
to March 31, 2017)¥ 48,726 million
59,171
20,471
5,325
192
590
¥
(94) million

Research and development expenses included in general and administrative expenses andmanufacturing costs for the years ended March 31, 2017 and 2018 were as follows:

Research and development expenses*4.

¥

Current fiscal year
(From April 1, 2017
to March 31, 2018)
4,832 million
USD 45 million

Current fiscal year
(From April 1, 2017
to March 31, 2018)Land¥ 818 million
Buildings and structures
2¥

821 million

USD 7 million0

USD 7 million

Loss on disposal of non-current assets for the years ended March 31, 2017 and 2018 were as follows:
Previous fiscal year
(From April 1, 2016
to March 31, 2017)

Buildings and structures
Tools, furniture and fixtures
Machinery, equipment andvehicles
Total

Current fiscal year
(From April 1, 2017
to March 31, 2018)¥275 million
33
19¥328 million

Buildings and structures
Tools, furniture and fixtures
SoftwareTotal- 41 -¥ 350 million

USD 3 million

7

0

7

0

¥ 366 million

USD 3 million

*6.

Restructuring loss

Restructuring loss primarily consisted of extraordinary severance payment expenses associated with therestructuring of business in Australia.

Notes to consolidated statements of comprehensive income*1.

Reclassification adjustments and tax effects related to other comprehensive income
Previous fiscal year
(From April 1, 2016
to March 31, 2017)

Valuation difference on available-for-sale securities:
Amount arising during the fiscal year
Reclassification adjustments
Amount before tax effects
Tax effects
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment:
Amount arising during the fiscal year
Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method:Amount arising during the fiscal year
Total other comprehensive income¥ 8,454 million
1,645
10,100(2,953)Current fiscal year
(From April 1, 2017
to March 31, 2018)¥ (3,084) million(426)(3,510)1,020

USD (29) million
(4)
(33)
9

7,147

(2,490)(23)(5,916)(5,916)(4,028)(4,028)

(38)
(38)

711
¥ 1,942 million- 42 -(336)¥ (6,855) million(3)
USD (64) million

Notes to consolidated statements of changes in equity
Previous fiscal year (From April 1, 2016 to March 31, 2017)
1. Matters concerning outstanding shares
As of April 1,
2016
141,669,000Type of share
Common shares

Increase–(Shares)
As of March 31,
2017
141,669,000–(Shares)
As of March 31,
201721,541,341

Decrease–

2. Matters concerning treasury shares
As of April 1,
2016
21,539,677

Type of share
Common shares

Increase

Decrease

1,664(Summary of causes of changes)
The increase is from acquisitions in line with purchase requests for shares less than one unit.
3. Matters concerning dividends(1) Amount of dividends paid
Resolution

Type ofshare

Annual General Meetingof Shareholders held on
June 29, 2016

CommonsharesDividends per
share

Amount of dividends¥14,415 million¥120

Record date

Effective date

March 31, 2016

June 30, 2016

(2) Dividend payments for which the record date is in the fiscal year ended March 31, 2017 and the effective
date is in the following fiscal year
Resolution

Type ofshare

Amount ofdividends

Source of Dividends per
dividends
share

Annual General Meetingof Shareholders held on
June 29, 2017

Commonshares¥51,654 million

Retainedearnings¥430

Record date

Effective date

March 31, 2017

June 30, 2017

Current fiscal year (From April 1, 2017 to March 31, 2018)
1. Matters concerning outstanding shares
Type of share
Common shares

As of April 1,
2017
141,669,000

Increase–(Shares)
As of March 31,
2018
141,669,000

70,673(Shares)
As of March 31,
201821,543,231

Decrease–

2. Matters concerning treasury shares
Type of share
Common shares

As of April 1,
2017
21,541,341

Increase
72,563

Decrease(Summary of causes of changes)
Increase in treasury shares consisted of: an increase of 1,917 shares from acquisitions in line with buyback
requests for shares less than one unit; and an increase of 70,646 shares involving shares of the parent
company held by a subsidiary included in the scope of consolidation in the fiscal year ended March 31, 2018.
Decrease in treasury shares consisted of: a decrease in 27 shares from sales in line with selling requests forshares less than one unit; and a decrease of 70,646 shares from sales of shares of the parent company held bya consolidated subsidiary.

- 43 -

3. Matters concerning dividends(1) Amount of dividends paid
Type ofshare

Resolution
Annual General Meetingof Shareholders held on
June 29, 2017
Meeting of Board of
Directors held on
October 30, 2017

Amount of dividends

Dividends per
share

Record date

Effective dateCommonshares¥51,654 million¥430

March 31, 2017

June 30, 2017

Commonshares¥13,213 million¥110

September 30,
2017

December 1,
2017(2) Dividend payments for which the record date is in the fiscal year ended March 31, 2018, and theeffective date is in the following fiscal year
Resolution

Type ofshare

Amount ofdividends

Source of Dividends per
dividends
share

Annual General Meetingof Shareholders held on
June 28, 2018

Commonshares¥57,660 million[USD 543 million]

Retainedearnings¥480[USD 4.52]

Record date

Effective date

March 31, 2018

June 29, 2018

Notes to consolidated statements of cash flow
*1.

The reconciliations of cash and cash equivalents at end of period with the amount presented in the
consolidated balance sheets for the years ended March 31, 2017 and 2018 were as follows:

Cash and deposits
Time deposits with maturity of more than
three months
Short-term investments with maturity of threemonths or less
Cash and cash equivalents*2.

Previous fiscal year
(From April 1, 2016
to March 31, 2017)¥ 662,763 million

Current fiscal year
(From April 1, 2017
to March 31, 2018)¥ 744,555 million
USD 7,024 million(362,801)(307,509)(2,901)31,01147,434447¥ 330,974 million¥ 484,480 million

USD 4,570 million

The breakdown of assets and liabilities at the time of commencement of consolidation associated with
newly including Nintendo Sales Co., Ltd. into the scope of consolidation as a result of acquisition of its
shares and the relationship between the acquisition price of its shares and net proceeds from purchaseof shares of subsidiaries resulting in change in scope of consolidation are as follows.
Current assets¥24,440 million

USD 230 million

Non-current assets

4,382

41

Current liabilities(19,720)(186)

Non-current liabilities

(192)

(1)

Gain on bargain purchase(1,406)(13)

Non-controlling interests(2,973)(28)

Acquisition price of shares of Nintendo Sales Co., Ltd.

4,530

42

Cash and cash equivalents of Nintendo Sales Co., Ltd.
Net: Proceeds from purchase of shares of subsidiaries
resulting in change in scope of consolidation(7,265)(68)- 44 -¥2,735 million

USD 25 million

Lease transactions
1.

Finance lease transactions

Information of finance leases as of March 31, 2017 and 2018 were omitted as they are immaterial.
2.

Operating lease transactions

Future lease payments under non-cancelable operating leases

Due within one year
Due after one year
Total

Previous fiscal year
(As of March 31, 2017)¥ 1,278 million
5,810¥ 7,089 million

Current fiscal year
(As of March 31, 2018)¥ 1,351 million
USD 12 million
4,799
45¥ 6,151 million
USD 58 million

Financial instruments
1.

Condition of financial instruments(1)

Policy for measures relating to financial instruments
Nintendo (the Company and its consolidated subsidiaries) invests its funds in highly safe financial assets suchas deposits. Nintendo utilizes derivatives to reduce risk as described below and for the purpose of improving
the investment yield on short-term financial assets, and does not enter into transactions for speculative
purposes.

(2)

Details of financial instruments, related risks, and risk management system
Notes and accounts receivable - trade are exposed to credit risk from customers. In order to reduce this risk,
Nintendo monitors the financial position and transaction history, assesses creditworthiness and sets atransaction limit for each customer. Since bonds included in securities and investment securities are mainly
those that are held to maturity and issued by financial institutions that have high creditworthiness, the credit
risk is minimal. Such bonds are also subject to foreign currency exchange risk and market risk. Nintendo
closely monitors the market price of such bonds and the financial position of the issuer and reviews theirstatus on a regular basis. Stocks included in investment securities are mainly those of companies with which
the Company has business relationships. These stocks are exposed to market risk, but the balance held isimmaterial.
Notes and accounts payable - trade and income taxes payable are all due within one year.
Derivative transactions include foreign exchange forward contracts, non-deliverable forward contracts andcurrency option contracts etc. to reduce risk of exchange rate fluctuations arising from deposits and tradereceivables denominated in foreign currencies. These transactions are conducted by the Finance Departmentof the Company and the departments in charge of financial matters of its consolidated subsidiaries after
securing approval from the president or the executive officer in charge within limits such as the balance of
foreign currency deposits. The status of derivative transactions is reported to the executive officer in charge
and the Board of Directors on a regular basis. Since counterparties of such transactions are limited to financial
institutions that have high creditworthiness, Nintendo judges that risk due to default is minimal.

(3)

Supplementary explanation regarding fair values of financial instruments
The fair values of financial instruments include values based on market prices and reasonably measured
values when market prices are unavailable. As variable factors are incorporated into the measurement of suchvalues, the values may vary depending on the assumptions used. In addition, the contract amounts of thederivative transactions described in “Derivative transactions” do not represent the market risk of derivativetransactions.

- 45 -

2.

Fair value of financial instruments

The book value on the consolidated balance sheets, fair value, and differences between them as of March 31, 2017and 2018 were as follows:
Previous fiscal year (As of March 31, 2017)

Cash and deposits
Notes and accounts receivable - trade
Short-term and long-term investment securities
Held-to-maturity debt securities
Other securities
Total assets
Notes and accounts payable - trade
Income taxes payable
Total liabilities
Derivatives

Book value
662,763
106,054

Fair value
662,763
106,054

172,144
242,159
1,183,122
104,181
11,267
115,448(286)

172,134
242,159
1,183,113
104,181
11,267
115,448(286)

Book value
744,555
69,829Fair value
744,555
69,829170,046
236,081
1,220,512
138,015
43,390181,406(1,258)170,021236,081
1,220,487
138,015
43,390181,406(1,258)(Millions of yen)
Difference
–
–
(9)
–
(9)
–
–
–
–

Current fiscal year (As of March 31, 2018)

Cash and deposits
Notes and accounts receivable - trade
Short-term and long-term investment securities
Held-to-maturity debt securities
Other securities
Total assets
Notes and accounts payable - trade
Income taxes payable
Total liabilities
Derivatives

Book value

Fair value(Millions of yen)
Difference
–
–
(24)
–
(24)
–
–
–
–
(Millions of dollars)
Difference

Cash and deposits
Notes and accounts receivable - trade
Short-term and long-term investment securities
Held-to-maturity debt securities
Other securities

7,024
658

7,024
658

–
–

1,604
2,227

1,603
2,227

(0)
–

Total assets
Notes and accounts payable - trade
Income taxes payable

11,514
1,302
409

11,514
1,302
409

(0)
–
–

Total liabilities

1,711
(11)

1,711
(11)

–
–

Derivatives(Notes) 1.

Fair value measurement of financial instruments and matters relating to securities and derivative transactions
Cash and deposits, notes and accounts receivable - trade
As these items are settled in a short period of time, their book values approximate their fair values.
Consequently, their fair values are based on their book values.
Short-term and long-term investment securities
The fair value of stocks is based on their prices on the securities exchanges. The fair values of bonds are
based on their prices provided by correspondent financial institutions. Securities classified by purpose ofholding are described in “Securities.”
Notes and accounts payable - trade and income taxes payable
As these items are settled in a short period of time, their book values approximate their fair values.
Consequently, their fair values are based on their book values.

- 46 -

Derivative transactions
Assets and liabilities arising from derivative transactions are shown on a net basis. The items that are net
liabilities are shown in the parentheses.
Matters regarding fair value measurement method and derivative transactions by type of transaction target areprovided in “Derivative transactions.”
2.

Consolidated balance sheets amounts of financial instruments for which the fair value is deemed extremely
difficult to determine
Previous fiscal year
(As of March 31, 2017)¥26,967 million

Unlisted stocks

Current fiscal year
(As of March 31, 2018)¥35,841 million
USD 338 million

These unlisted stocks which do not have market prices and of which future cash flow cannot be estimated are notincluded in “Short-term and long-term investment securities,” since the estimation of the fair value is deemed to be
extremely difficult.
3.

Redemption schedule for monetary receivables and securities with maturity subsequent to the consolidated
account closing datePrevious fiscal year (As of March 31, 2017)(Millions of yen)
Due after one year
through five years

Due after five years
through ten years

662,763
106,054––––

134,022
13,00025,121

–
–
–

–
–
–

3,663
107,374
1,137
1,053,137–
47,03816,12863,167

–
–
4,118
4,118

Due within one year
Cash and deposits
Notes and accounts receivable - trade
Short-term and long-term investment
securities
Held-to-maturity debt securities
Certificate of deposits
Money held in trust
Corporate and government bonds
Other securities with maturity
Certificate of deposits
Corporate and government bonds
Other
Total
Current fiscal year (As of March 31, 2018)(Millions of yen)
Due after one year
through five years

Due after five years
through ten years

744,555
69,829––––136,664
13,00020,374

–
–
–

–
–
–

4,568
68,832
4,526

4,764
78,571
14,255––
1,085

1,062,351

97,591

1,085

Due within one year
Cash and deposits
Notes and accounts receivable - trade
Short-term and long-term investment
securities
Held-to-maturity debt securities
Certificate of deposits
Money held in trust
Corporate and government bonds
Other securities with maturity
Certificate of deposits
Corporate and government bonds
Other
Total

- 47 -

(Millions of dollars)
Due after one year
through five years

Due after five years
through ten years

7,024
658

–
–

–
–

1,289
122
192

–
–
–

–
–
–

43
649
42
10,022

44
741
134
920

–
–
10
10

Due within one year
Cash and deposits
Notes and accounts receivable - trade
Short-term and long-term investment
securities
Held-to-maturity debt securities
Certificate of deposits
Money held in trust
Corporate and government bonds
Other securities with maturity
Certificate of deposits
Corporate and government bonds
Other
Total

Securities
1.

Held-to-maturity debt securities
Previous fiscal year (As of March 31, 2017)

Securities whose fair value exceeds their bookvalue on the consolidated balance sheets
Securities whose fair value does not exceed theirbook value on the consolidated balance sheets
Total

Book value

Fair value(Millions of yen)
Difference

3,000

3,001

1

169,144

169,133(10)

172,144

172,134(9)Book value

Fair value(Millions of yen)
Difference

―

―

―

170,046

170,021(24)

170,046

170,021(24)

Book value

Fair value(Millions of dollars)
Difference

―

―

―

1,604

1,603

(0)

1,604

1,603

(0)

Current fiscal year (As of March 31, 2018)

Securities whose fair value exceeds their bookvalue on the consolidated balance sheets
Securities whose fair value does not exceed theirbook value on the consolidated balance sheets
Total

Securities whose fair value exceeds their bookvalue on the consolidated balance sheets
Securities whose fair value does not exceed theirbook value on the consolidated balance sheetsTotal- 48 -

2.

Other securities
Previous fiscal year (As of March 31, 2017)

Securities whose book value on the consolidatedbalance sheets exceeds their acquisition cost
Equity securities
Debt securities
Other
Sub-total
Securities whose book value on the consolidatedbalance sheets does not exceed their acquisition
cost
Equity securities
Debt securities
Other
Sub-total
Total(Millions of yen)
DifferenceBook value

Acquisition cost

54,76596,937
10,499162,202

27,83596,365
10,320134,520

26,930572
179
27,681

977
78,922
58
79,957242,159

1,129
79,842
58
81,029215,549

(152)
(920)
–
(1,072)
26,609Book value

Acquisition cost

53,61754,4209,103
117,140

28,92054,384
8,842
92,147

24,69635
260
24,993908
112,797
5,235
118,940

1,370
114,142
5,237
120,750(462)(1,344)(2)(1,809)236,081

212,897

23,183

Book value

Acquisition cost

Current fiscal year (As of March 31, 2018)

Securities whose book value on the consolidatedbalance sheets exceeds their acquisition cost
Equity securities
Debt securities
Other
Sub-total
Securities whose book value on the consolidatedbalance sheets does not exceed their acquisition
cost
Equity securities
Debt securities
Other
Sub-total
Total

Securities whose book value on the consolidatedbalance sheets exceeds their acquisition cost
Equity securities
Debt securities
Other
Sub-total
Securities whose book value on the consolidatedbalance sheets does not exceed their acquisition
cost
Equity securities
Debt securities
Other(Millions of yen)
Difference(Millions of dollars)
Difference

505
513
85
1,105

272
513
83
869

232
0
2
235

8
1,064
49

12
1,076
49

(4)
(12)
(0)

Sub-total

1,122

1,139

(17)

Total

2,227

2,008

218

- 49 -

3.

Other securities sold during the fiscal years ended March 31, 2017 and 2018
Previous fiscal year (From April 1, 2016 to March 31, 2017)

Debt securities
Other
Total

Total gain
36
27
63

(Millions of yen)
Total loss
(9)
(0)
(9)

Amount sold121,40945,709167,119

Total gain
21
490
512

(Millions of yen)
Total loss
(98)
(2)
(100)

Amount soldTotal gain

(Millions of dollars)
Total loss

Amount sold
185,330
29,143
214,473

Current fiscal year (From April 1, 2017 to March 31, 2018)

Debt securities
Other
Total

Debt securities
Other
Total

1,145
431
1,576

0
4
4

- 50 -

(0)
(0)
(0)

4.

Securities subject to booking of impairment loss
Previous fiscal year (from April 1, 2016 to March 31, 2017)
Not applicable.
Current fiscal year (from April 1, 2017 to March 31, 2018)
Information on securities subject to booking of impairment loss was omitted as they are immaterial.

Derivative transactions
Derivative contracts not qualifying for hedge accounting
Currencies
Previous fiscal year (As of March 31, 2017)Classification

Type of transaction
Exchange forward
contracts
Selling Canadian
DollarSelling British Pound

Transactions otherthan market
transactions

Currency options
Written call options
Euro[Premium](Millions of yen)Contract amountPortion ofcontract amountover one year

Fair value

Unrealized
gain (loss)

4,575

–

2

2

1,382

–

(17)

(17)

12,758
[212]

–
[–]

156

55

7,415
[11]

–
[–]

12

1

11,414

–

(127)

(127)

Purchased put options
Euro[Premium]
Currency swaps
Receiving Japanese
Yen /paying US Dollar
Total

–

–

–

Contract amountPortion ofcontract amountover one year

(85)

Current fiscal year (As of March 31, 2018)
Classification

Type of transaction
Exchange forward
contracts
Selling Canadian
Dollar(Millions of yen)
Fair value

Unrealized
gain (loss)

2,214

–

17

18

8,692

–

(102)

(102)

Euro
[Premium]

9,912
[12]

–
[–]

3

8

Australian Dollar[Premium]

1,637
[5]

–
[–]

8

(3)

6,608
[18]

–
[–]

14

(3)

(1,174)(1,174)–(1,257)

Selling British Pound
Currency options
Written call options
Transactions otherthan market
transactions

Purchased put options
Euro[Premium]
Currency swaps
Receiving Japanese
Yen /paying US Dollar
Total

22,493–––- 51 -

(Millions of dollars)
Classification

Type of transaction

Contract amount

Exchange forward
contracts
Selling Canadian
DollarSelling British Pound

Transactions otherthan market
transactions

Currency options
Written call options
Euro[Premium]
Australian Dollar[Premium]

Portion ofcontract amountover one year

Fair value

Unrealized
gain (loss)

20

–

0

0

82

–

(0)

(0)

93
[0]
15
[0]

–
[–]
–
[–]

0

0

0

(0)

62
[0]

–
[–]

0

(0)

(11)

(11)

Purchased put options
Euro[Premium]
Currency swaps
Receiving Japanese
Yen /paying US Dollar
Total(Notes) 1.
2.

212
–

–
–

–

(11)

The fair value as of March 31, 2017 and 2018 is calculated based on price quoted by correspondent financial
institutions.
Amounts presented in square parentheses [ ] above are option premiums.

Retirement benefits
1. Summary of retirement benefit plans adopted
The Company has a defined benefit corporate pension plan and a lump-sum severance payment plan which aredefined benefit plans. Certain consolidated subsidiaries have defined contribution plans as well as defined benefit
plans. The Company and certain consolidated subsidiaries may also pay extra retirement allowance to employees.
Certain consolidated subsidiaries adopt a simple method to calculate retirement benefit obligation.
2. Defined benefit plans(1)

Reconciliation between beginning balance and ending balance of retirement benefit obligations (excluding
those under the plan in which a simple method is applied)

Beginning balance of retirement benefit obligations
Current service costs
Interest cost
Actuarial gains and losses
Retirement benefits paid
Prior service cost accrued
Foreign currency translation difference

Previous fiscal year
(From April 1, 2016
to March 31, 2017)(Millions of yen)
49,7803,046
957
9(1,062)(2,654)(160)

Ending balance of retirement benefit obligations

49,916- 52 -

Current fiscal year
(From April 1, 2017
to March 31, 2018)(Millions of yen)
(Millions of dollars)
49,916
470
2,627
24
1,087
10
1,262
11
(2,151)(20)––(1,488)(14)
51,253483

(2)Reconciliation between beginning balance and ending balance of plan assets (excluding those under the planin which a simple method is applied)

Beginning balance of plan assets
Expected return on assets
Actuarial gains and losses
Contribution by the business operator
Retirement benefits paid
Foreign currency translation difference
Ending balance of plan assets(3)

Previous fiscal year
(From April 1, 2016
to March 31, 2017)(Millions of yen)
33,548
1,685
(156)
4,427
(974)
86
38,616

Reconciliation between beginning balance and ending balance of net defined benefit liability under the plan inwhich a simple method is applied

Beginning balance of net defined benefit liability
Retirement benefit expenses
Retirement benefit payment
Contribution into plan
Other
Foreign currency translation difference

Previous fiscal year
(From April 1, 2016
to March 31, 2017)(Millions of yen)
221
51
(2)
(7)
–
(0)

Ending balance of net defined benefit liability(4)

Current fiscal year
(From April 1, 2017
to March 31, 2018)(Millions of yen)
(Millions of dollars)
38,616
364
1,706
16
207
1
5,168
48
(1,994)
(18)
(929)
(8)
42,774
403

263

Current fiscal year
(From April 1, 2017
to March 31, 2018)(Millions of yen)
(Millions of dollars)
263
2
79
0
(23)
(0)
(39)
(0)
(82)
(0)
(0)
(0)
199

1

Reconciliation between ending balance of retirement benefit obligations and plan assets, and net defined
benefit liability and net defined benefit asset recorded in consolidated balance sheets

Retirement benefit obligations for funded plans
Plan assets
Retirement benefit obligations for unfunded plans
Net amounts of liabilities and assets recorded inconsolidated balance sheets
Net defined benefit liability
Net defined benefit asset

Previous fiscal year
(As of March 31, 2017)(Millions of yen)
36,542(38,672)

Current fiscal year
(As of March 31, 2018)(Millions of yen)
(Millions of dollars)
38,927367(43,329)(408)(2,130)13,694(4,401)
13,079(41)
123

11,564

8,678

81

19,245(7,680)16,609(7,931)

156
(74)

8,678

81

Net amounts of liabilities and assets recorded in
11,564
consolidated balance sheets(Note) Includes those under the plan in which a simple method is applied.

- 53 -

(5)Retirement benefit expenses and their breakdown
Previous fiscal year
(From April 1, 2016
to March 31, 2017)(Millions of yen)
3,098
957
(1,685)Current fiscal year
(From April 1, 2017
to March 31, 2018)(Millions of yen)
(Millions of dollars)
2,707
25
1,087
10
(1,706)(16)

Current service costs
Interest cost
Expected return on assets
Amortization of actuarial gains and losses treated
166
1,055
9
as expenses
Prior service cost recognized as cost
(2,654)––
Severance payment expenses
73
–
–
Other
216
56
0
Retirement benefit expenses for defined benefit
171
3,199
30
plan
(Note) Retirement benefit expenses of consolidated subsidiaries applying a simple method are recorded in “Current service
costs.”(6) Plan assets
a. Main components of plan assets
The ratios of components to plan assets by major category are as follows.
Previous fiscal year
(As of March 31, 2017)
Stocks
Bonds
Other
Total

34%
56
10
100%

Current fiscal year
(As of March 31, 2018)
27%
61
12
100%

b. Method for establishing expected long-term return rate on plan assets
In order to determine expected long-term return rate on plan assets, the present as well as expected future
allocation of plan assets, along with the present as well as expected long-term rate of return on various assets
comprising plan assets, are considered.
(7)

Matters concerning the basis for actuarial calculation
The main calculation bases for actuarial gains or losses are as follows.

Discount rate
Expected long-term return rate on plan assets

Previous fiscal year
(From April 1, 2016
to March 31, 2017)

Current fiscal year
(From April 1, 2017
to March 31, 2018)

0.6% to 3.9%

0.5% to 3.9%

3.9% to 7.0%

2.4% to 5.5%

3. Defined contribution plans
The amount of contribution required for the defined contribution plans at certain consolidated subsidiaries was¥1,141 million for the year ended March 31, 2017 and ¥2,042 million (USD 19 million) for the year ended March
31, 2018.

- 54 -

Income taxes
1. Significant components of deferred tax assets and liabilities
Previous fiscal year
(As of March 31, 2017)
Deferred tax assets
Research and development expenses
Unrealized intra-group profit and write-downs oninventory
Accounts payable - other and accrued expenses
Excess depreciation of deferred assets
Revenue recognition for tax purposes
Net defined benefit liability
Other
Deferred tax assets subtotal
Valuation allowance
Total deferred tax assets
Deferred tax liabilities
Undistributed retained earnings of subsidiaries
and associates
Valuation difference on available-for-salesecurities
Other
Total deferred tax liabilities
Net deferred tax assets¥ 29,663 million

Current fiscal year
(As of March 31, 2018)¥ 30,758 million

USD 290 million

3,123

9,898

93

5,015
5,269
4,637
5,802
20,98474,496(1,551)
72,944

6,503
6,003
4,476
3,814
10,221
71,676(743)
70,933

61
56
42
35
96
676
(7)
669

(9,643)(11,573)(109)(7,981)(7,298)(68)(6,060)(23,685)¥ 49,259 million(4,406)(23,279)¥ 47,654 million

(41)
(219)
USD 449 million

2. Significant factors in the difference between the statutory tax rate and effective tax rate

Statutory tax rate
(Reconciliations)Different tax rates applied to the consolidated subsidiaries
Foreign tax credit on retained earnings of the overseas
consolidated subsidiaries
Effect of unrecognized tax effect on unrealized gains
Effect of profit and loss of the associates accounted for using
equity method
Valuation allowances
Other
Effective tax rate after tax effect accounting

Previous fiscal year
(As of March 31, 2017)
30.8%

Current fiscal year
(As of March 31, 2018)
–

5.0

–

2.4

–

(0.8)

–

(5.7)

–

(22.0)
0.9

–
–

10.6%

–

(Note) The difference between the statutory tax rate and the effective tax rate after tax effect accounting in thefiscal year ended March 31, 2018 is omitted as it was no more than 5% of the statutory tax rate.
3. Adjustment of amount of deferred tax assets and deferred tax liabilities due to change in income tax rate
As the U.S. tax reform bill “Tax Cuts and Jobs Act” was enacted on December 22, 2017, the statutory tax rate usedin calculating deferred tax assets and deferred tax liabilities of consolidated subsidiaries in the U.S. in the fiscal
year ended March 31, 2018 was changed to mainly 24.31% (from mainly 37.66% in the fiscal year ended March 31,2017) with respect to temporary differences, etc. that are expected to be collected or paid in the consolidated fiscal
year(s) commencing on or after April 1, 2018.
This has resulted in a decrease in the amount of deferred tax assets (net of deferred tax liabilities) by ¥2,265 million(USD 21 million), an increase in the amount of valuation difference on available-for-sale securities by ¥17 million(USD 0 million), an increase in foreign currency translation adjustment by ¥101 million (USD 0 million), and anincrease in income taxes - deferred by ¥2,384 million (USD 22 million).

- 55 -

Business combinations, etc.
Business combination by acquisition(1) Description of business combination
The Company acquired the shares of JESNET Co. Ltd. (“JESNET”) on April 3, 2017 and turned it into its
consolidated subsidiary in the first quarter of the fiscal year ended March 31, 2018.
(i) Name of acquired company and description of its business
Name of acquired company: JESNET Co. Ltd.
Description of business:Nintendo game systems, game system accessories, game software, card
games, other amusement business(ii) Main reason for conducting business combination
JESNET Co. Ltd. has been one of the largest-scale companies dedicated to handling Nintendo products inJapan for many years, selling mainly video game systems through its nationwide distribution network. Thisacquisition will unify Nintendo’s product development acumen with JESNET’s robust stocking and sales
networks to form a supply structure that can meet consumer demand in a timely fashion. This means that
Nintendo will have an integrated system from the development through supply of its products, allowing for
rapid decision-making and an improvement in sales service. These steps are intended to strengthen theoverall competitiveness of the Nintendo group and increase its corporate value.
(iii) Business combination date
April 3, 2017 (stock acquisition date)
April 1, 2017 (deemed acquisition date)(iv) Legal form of business combination
Stock acquisition(v) Name of company after acquisition
Nintendo Sales Co., Ltd.
(vi) Percentage of voting rights acquired
70%(vii) Principal grounds on which company subject to acquisition was determined
The Company effectively took control of the acquired company as a result of the acquisition of its sharesby the Company in exchange for cash.
(2) Period of business results of acquired company included in consolidated financial statements
From April 1, 2017 to March 31, 2018
(3) Acquisition cost of acquired company and breakdown of consideration by type
Consideration for acquisition:
Cash¥4,530 million (USD 42 million)
Acquisition cost:¥4,530 million (USD 42 million)(4) Description and amount of main acquisition-related expenses
Advisory fees, etc.
¥113 million (USD 1 million)(5) Amount and cause of gain on bargain purchase(i) Amount of gain on bargain purchase¥1,406 million (USD 13 million)(ii) CauseAs the market value of net assets exceeded the acquisition cost at the time of business combination, thedifference was recognized as a gain on bargain purchase.

- 56 -

(6) Amount and breakdown of assets received and liabilities assumed on business combination dateCurrent assets¥24,440 million (USD 230 million)
Non-current assets
Total assets¥4,382 million (USD 41 million)¥28,822 million (USD 271 million)

Current liabilities¥19,720 million (USD 186 million)

Non-current liabilities
Total liabilities¥192 million (USD 1 million)¥19,912 million (USD 187 million)(7) Estimate of amount of impact on consolidated statements of income for the fiscal year ended March 31,2018 if business combination is assumed to have been completed on the first day of the fiscal year andcalculation method thereofThis information was omitted as the deemed acquisition date is set at the first day of the fiscal year ended
March 31, 2018.
Asset retirement obligations
Information of asset retirement obligations was omitted as its amount is immaterial.

Real estate for rent
Information of real estate for rent was omitted as its amount is immaterial.

Segment information, etc.
Segment information
The main business of Nintendo is developing, manufacturing, and distributing handheld and home console
hardware systems and related software. Development and manufacturing of products for worldwide use are
primarily done by the Company while distribution is done mainly by local subsidiaries. Nintendo operates as asingle operating segment with single distribution channel and market for Nintendo’s products and with each major
subsidiary solely responsible for distributing. Decision for allocation of the management resources and evaluationof business results are made on a company-wide basis, not based on a product category or region basis. Therefore,
segment information is omitted.
Related information
Previous fiscal year (From April 1, 2016 to March 31, 2017)
1. Information about products and services(Millions of yen)
Nintendo 3DS
Platform
Sales to third
parties

Nintendo Switch
Platform

247,949

110,951

Other

Total

130,194

489,095

2. Information by geographic areas(1)

Net sales(Millions of yen)Japan

(Note)The Americas

Europeof which U.S.

Other

130,014203,954
174,093
129,455
25,671
Net sales are categorized by country or region based on the location of the customer.

- 57 -

Total
489,095

(2)Property, plant and equipment
Japan

U.S.

64,195(Note)(Millions of yen)
Total

Other

21,576787

86,558Property, plant and equipment are categorized by country based on its location.

3. Information about major customers
Of sales to third parties, no major customer accounts for 10% or more of net sales in the consolidated financial
statements of income.
Current fiscal year (From April 1, 2017 to March 31, 2018)
1. Information about products and services(Millions of yen)

Sales to third parties

Nintendo 3DS Platform

Nintendo Switch Platform

Other

Total

188,269

753,409

114,003

1,055,682(Millions of dollars)

Sales to third parties(Note)

Nintendo 3DS Platform

Nintendo Switch Platform

1,776

7,107

Other

Total

1,075

9,959

The previously used classification, i.e., “Nintendo 3DS Platform,” “Wii U Platform,” “Nintendo Switch Platform,”and “Other” was changed as presented above from the fiscal year ended March 31, 2018. Accordingly, “1.
Information about products and services” of the previous fiscal year was reclassified.

2. Information by geographic areas(1)

Net sales(Millions of yen)
The Americas

Japan

Europeof which U.S.

261,189441,210376,356

Other

268,900

84,382

Total
1,055,682(Millions of dollars)
The Americas

Japan(Note)(2)

Europeof which U.S.

Other

2,464
4,162
3,550
2,536
Net sales are categorized by country or region based on the location of the customer.

Total

796

9,959

Property, plant and equipment(Millions of yen)
Japan

U.S.

63,626

Other

19,503

Total
796

83,926(Millions of dollars)
Japan

U.S.
600

(Note)

Other
183

Total
7

Property, plant and equipment are categorized by country based on its location.

- 58 -

791

3. Information about major customers
Of sales to third parties, no major customer accounts for 10% or more of net sales in the consolidated financial
statements of income.
Information about impairment loss of non-current assets by reportable segment
The information was omitted as Nintendo operates as a single operating segment.
Information about amortized and unamortized balances of goodwill by reportable segment
The information was omitted as Nintendo operates as a single operating segment.
Information about gain on bargain purchase by reportable segment
The information was omitted as Nintendo operates as a single operating segment.

- 59 -

Information about related party
1. Related party transactions
Not applicable.
2. Note about significant associates
Summary financial information of significant associates
Summary financial information of all associates accounted for under the equity method (4 companies) including
The Pokémon Company, a significant associate, for the fiscal year ended March 31, 2017, is as follows.
Previous fiscal year

Current fiscal year

Total current assets(Millions of yen)

111,641––

Total non-current assets(Millions of yen)

34,935––

Total current liabilities(Millions of yen)

48,601––

Total non-current liabilities(Millions of yen)

41,322––

Total net assets(Millions of yen)

56,652––

Net sales(Millions of yen)

166,109––

Profit before income taxes(Millions of yen)

62,026––

Profit(Millions of yen)
42,045––(Note) 1. The Company had designated The Pokémon Company as a significant associate from the fiscal year ended March 31,2017 due to its increased materiality. The summary financial information of said company is included in the above.
2. Due to decreased materiality for the fiscal year ended March 31, 2018, statement is omitted.

Per share information
Previous fiscal year
(From April 1, 2016
to March 31, 2017)
Net assets per share¥ 10,412.59¥ 10,980.45

USD 103.58

853.87

1,162.30

10.96

Profit per share(Notes) 1.
2.

Current fiscal year
(From April 1, 2017
to March 31, 2018)

Diluted profit per share is omitted as no residual securities were outstanding as of March 31, 2017 and 2018.
The basis of calculation of profit per share is as follows:
Previous fiscal year
(From April 1, 2016
to March 31, 2017)

Profit attributable to owners of parent¥102,574 million¥ 139,590 million

USD 1,316 million

Amount not attributable to commonshareholders

–

–

–

Profit attributable to owners of parent
related to common shares¥102,574 million¥ 139,590 million

USD 1,316 million

Average number of shares (commonshares)120,128
thousand shares

120,098
thousand shares

Significant subsequent events
Not applicable.
(v)

Current fiscal year
(From April 1, 2017
to March 31, 2018)

Supporting schedules to the consolidated financial statements

Supplemental schedule of bonds
Not applicable.

- 60 -–

Supplemental schedule of borrowings
Averageinterest rate (%)

Classification

Beginning balanceEnding balance

Short-term loans payable

–

–

–

–

Long-term loans payable due within
one year

–

–

–

–

Lease obligations due within one year–

¥14 million[USD 0 million]––

Long-term loans payable due after one
year

–

–

–

–

Lease obligations due after one year–

¥32 million[USD 0 million]–

September 2019
– February 2022

Other interest-bearing liabilities

–

–

–

–

–

¥46 million[USD 0 million]

–

–

Total

Payment due(Note) 1. The average interest rates of lease obligations are omitted as the interest equivalents included in the total lease
payments are allocated to each fiscal year by straight-line basis.
2. With respect to lease obligations due after one year, the scheduled annual repayment amount within five years fromthe consolidated account closing date is as follows.
More than one year
but no more than two
years(Millions of yen)More than two years
but no more than
three years(Millions of yen)More than three years
but no more than fouryears(Millions of yen)More than four years
but no more than fiveyears(Millions of yen)

14

14

3

―

Lease obligations

Supplemental schedule of asset retirement obligations
The information was omitted as the amounts of asset retirement obligations as of the beginning and end of the
fiscal year ended March 31, 2018 were less than or equal to a hundredth of the total of liabilities and net assets
as of the beginning and end of the fiscal year ended March 31, 2018.
(2) Other
Quarterly information of the fiscal year ended March 31, 2018
Three months
154,069
31,363Six months
374,041
71,208Nine months
857,012
196,375(Millions of yen)
Fiscal year
1,055,682
201,090

Profit attributable to owners ofparent21,26051,503

135,165

139,590

Profit per share

177.09428.94

1,125.53

1,162.30

Three months

Six months

Nine months(Millions of dollars)
Fiscal year

1,453
295

3,528
671

8,085
1,852

9,959
1,897

Profit attributable to owners ofparent

200

485

1,275

1,316

Profit per share

1.67

4.04

10.61

10.96

(Cumulative period)
Net sales
Profit before income taxes(Yen)(Cumulative period)
Net sales
Profit before income taxes(Dollars)(Accounting period)
Profit per share(Accounting period)
Profit per shareFirst quarter

Second quarter

Third quarter(Yen)
Fourth quarter

251.84696.45

36.84

Second quarter
2.37

Third quarter
6.57(Dollars)
Fourth quarter
0.34

177.09First quarter
1.67- 61 -

Corporate Information
Common Stock
Nintendo Co., Ltd. common stock is listed on the Tokyo Stock Exchange, Section 1.
Annual General Meeting of Shareholders
The Annual General Meeting of Shareholders for the fiscal year ended March 31, 2018 was held on June 28, 2018at Nintendo Co., Ltd. in Kyoto, Japan.
Independent Auditor
PricewaterhouseCoopers Kyoto
Kyoto, Japan

Contact Information
Investor Relations
Investor Relations Group
General Accounting & Control Department
Nintendo Co., Ltd.
11-1 Hokotate-cho, Kamitoba, Minami-ku,
Kyoto 601-8501, Japan
Tel: +81-75-662-9600
E-mail: IR@nintendo.co.jp

Corporate Communications
Public Relations Group
General Affairs Department
Nintendo Co., Ltd.
11-1 Hokotate-cho, Kamitoba, Minami-ku,
Kyoto 601-8501, Japan
Tel: +81-75-662-9600
Corporate Communications Department
Nintendo of America Inc.
2000 Bridge Parkway Ste 200,
Redwood City, CA 94065
Tel: +1-650-226-4040

For more information, please visit Nintendo’s website.
President’s Message
https://www.nintendo.co.jp/ir/en/management/message.html
Dividend Policy
https://www.nintendo.co.jp/ir/en/stock/dividend/index.html#haitou_houshin
Financial Data
https://www.nintendo.co.jp/ir/en/sales/index.html
Company History
https://www.nintendo.co.jp/corporate/en/history/index.html
CSR Reporthttps://www.nintendo.co.jp/csr/en/index.html- 62 -