Japanese entertainment distributor Happinet Corp. reported net income climbed 39% in its fiscal first quarter as the June launch of Nintendo’s Switch 2 console drove demand across its gaming and toy divisions.
The Tokyo-based company posted net profit of ¥3.32 billion ($22.5 million) for the three months ended June, compared with ¥2.39 billion a year earlier. Revenue increased 16.5% to ¥95.93 billion ($649 million), while operating profit rose 20.3% to ¥3.94 billion ($26.7 million).
Nintendo’s new Switch 2, which launched June 5 at a retail price of ¥49,980, helped propel Happinet’s video game segment to a 32.2% revenue increase. The division generated ¥24.52 billion in sales and ¥585 million in segment profit, representing a 64.5% jump in earnings.
The gaming distributor also benefited from growth in its amusement operations, where capsule toy vending machines continue gaining popularity. The segment’s revenue climbed 20.9% to ¥14.57 billion, while profits surged 57.4% to ¥1.17 billion. Tourist demand has particularly boosted the capsule toy market, with Happinet operating 141 “Gachapo” stores as of June.
However, the company’s video and music business faced headwinds despite higher sales. While revenue increased 12.6% to ¥15.68 billion, segment profits plunged 40.4% to ¥256 million due to investment losses on foreign film acquisitions.
Happinet’s toy division posted more modest gains, with sales up 8.8% to ¥41.15 billion and profits rising 10% to ¥2.31 billion. The company cited strong performance from Bandai Spirits lottery products sold at convenience stores and steady demand for collectible figures.
For the full fiscal year ending March 2026, management expects revenue of ¥390 billion, up 7% from the previous year. Operating profit is projected to increase just 1% to ¥11.8 billion, suggesting the Nintendo Switch 2 boost may moderate in coming quarters.
Happinet shares have surged more than 46% over the past six months, significantly outperforming Japan’s broader Nikkei 225 index. The stock trades at approximately 12 times trailing earnings.
