Nintendo : Annual Report 2020

July 20, 2020 at 11:06 am

Annual Report 2020

for the fiscal year ended March 31, 2020

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.	History ............................................................................................................................................................	3
3.	Description of business...................................................................................................................................	4
4.	Subsidiaries and associates .............................................................................................................................	5
5.	Employees.......................................................................................................................................................	7
II.	Business Overview ..........................................................................................................................................	8
1.	Management policy, management environment, issues to address .................................................................	8
2.	Risk factors .....................................................................................................................................................	9
3.	Analysis of financial position, operating results and cash flow by the management....................................	12
4.	Material contracts, etc...................................................................................................................................	16
5.	Research and development activities ............................................................................................................	16
III.	Equipment and Facilities ...............................................................................................................................	18
1.	Overview of capital investments ....................................................................................................................	18
2. Major facilities ...............................................................................................................................................	18
3.	Plans for new installation and retirement of equipment and facilities, etc. ....................................................	19
IV.	Profile of the Company..................................................................................................................................	20
1.	Status of shares and other relevant matters ...................................................................................................	20
2.	Status of acquisition of treasury shares and other relevant matters ..............................................................	26
3.	Dividend policy.............................................................................................................................................	28
4.	Corporate governance ...................................................................................................................................	29
V. Financial Information.........................................................................................................................................	44
Consolidated financial statements, etc................................................................................................................	44

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 other information 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 this translation 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 and practices 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 and relevant 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 not necessarily agree with the sums of the individual amounts.

The consolidated financial statements presented herein are stated in Japanese yen, the currency of the country in which the Company is incorporated and operates. The rate of ¥108 to 1 USD, the approximate current rate of exchange on March 31, 2020, 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 in countries 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			76th	77th	78th	79th	80th

	Fiscal year ended March 31		2016	2017	2018	2019	2020
	Net sales		(Millions of yen)		¥504,459	¥489,095	¥1,055,682	¥1,200,560	¥1,308,519	USD 12,115
			(Millions of dollars)

	Operating profit			32,881	29,362	177,557	249,701	352,370	3,262
			(Millions of yen)
			(Millions of dollars)

	Ordinary profit			28,790	50,364	199,356	277,355	360,461	3,337
			(Millions of yen)
			(Millions of dollars)

	Profit attributable to owners of
	parent					16,505	102,574	139,590	194,009	258,641	2,394
			(Millions of yen)

			(Millions of dollars)

	Comprehensive income			(3,689)	104,525	134,090	200,341	236,490	2,189
			(Millions of yen)
			(Millions of dollars)

	Net assets		(Millions of yen)		1,160,901	1,250,972	1,323,574	1,414,798	1,540,900	14,267
			(Millions of dollars)


	Total assets		(Millions of yen)		1,296,902	1,468,452	1,633,474	1,690,304	1,934,087	17,908
			(Millions of dollars)


	Net assets per share	(Yen)		9,662.73	10,412.59	10,980.45	11,833.91	12,933.51	119
				(Dollars)


	Profit per share	(Yen)		137.40	853.87	1,162.30	1,615.51	2,171.20	20
				(Dollars)


	Diluted profit per share	(Yen)		-	-	-	-	-	-
				(Dollars)


	Capital adequacy ratio			89.50	85.15	80.75	83.40	79.66	-
				(%)


	Return on equity (ROE)		1.42	8.51	10.86	14.22	17.53	-
				(%)


	Price earnings ratio (PER)		116.45	30.26	40.32	19.54	19.16	-
				(Times)

	Cash flows from operating
	activities					55,190	19,101	152,208	170,529	347,753	3,219
			(Millions of yen)

			(Millions of dollars)
	Cash flows from investing
	activities					(71,740)	69,518	61,387	45,353	(188,433)	(1,744)
			(Millions of yen)

			(Millions of dollars)
	Cash flows from financing
	activities					(2,996)	(14,435)	(61,311)	(109,037)	(111,031)	(1,028)
			(Millions of yen)

			(Millions of dollars)
	Cash and cash equivalents at
	end of period	(Millions of yen)		¥258,095	¥330,974	¥484,480	¥585,378	¥621,402	USD 5,753
			(Millions of dollars)

	Number of employees (Persons)		5,064	5,166	5,501	5,944	6,200	-

	(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.	Effective beginning the 79th fiscal year, the Company has adopted the "Partial Amendments to Accounting Standard
		for Tax Effect Accounting, etc. (Accounting Standards Board of Japan (ASBJ) Guidance No.28 of February 16,
		2018)." The accounting standard has been retrospectively applied to the major management indicators for the 78th
		fiscal year and earlier.
							- 2	-

2. History

November 1947	Established as Marufuku Co., Ltd. in Higashikawara-cho, Imagumano, Higashiyama-ku, Kyoto,
	Japan as a manufacturer/distributor of Japanese playing cards (karuta) and western playing cards.
September 1949	Changed the company's name to Marufuku Karuta Hanbai Co., Ltd.
March 1950	Changed the company's name to Nintendo Karuta Co., Ltd. and took over karutamanufacturing
	operations of Yamauchi Nintendo & Co. (currently Yamauchi Co., Ltd.)
July 1951	Changed the company's name to Nintendo Playing Card Co., Ltd.
September 1959	Moved the headquarters to 60 Kamitakamatsu-cho, Fukuine, Higashiyama-ku, Kyoto, Japan.
September 1961	Established the Tokyo Branch in Tokyo, Japan.
January 1962	Listed stock on the Second Section of the Osaka Securities Exchange and on the Kyoto Stock
	Exchange.
October 1963	Changed the company's name to Nintendo Co., Ltd. (current trade name).
July 1970	Stock listing was changed to the First Section of the Osaka Securities Exchange.
April 1980	Established a wholly-owned subsidiary, Nintendo of America Inc., in New York, U.S.A.
February 1982	Established a new wholly-owned subsidiary, Nintendo of America Inc. (currently a consolidated
	subsidiary), in Washington, U.S.A. and merged the New York subsidiary into it through an
	absorption-type merger.
July 1983	Listed stock on the First Section of the Tokyo Stock Exchange.
November 1983	Established a new plant in Makishima-cho, Uji City, Kyoto, Japan (currently Uji Plant).
February 1990	Established a wholly-owned subsidiary, Nintendo of Europe GmbH (currently a consolidated
	subsidiary), in Germany.
February 1993	Established a wholly-owned subsidiary, Nintendo France S.A.R.L. (currently a consolidated
	subsidiary), in France.
November 2000	Moved the headquarters to 11-1Hokotate-cho, Kamitoba, Minami-ku, Kyoto, Japan (current
	location).
July 2006	Established a wholly-owned subsidiary, Nintendo of Korea Co., Ltd. (currently a consolidated
	subsidiary), in South Korea.
June 2016	Transitioned to a company with an Audit and Supervisory Committee.
April 2017	Acquired shares of JESNET Co. Ltd. and changed its trade name to Nintendo Sales Co., Ltd.
	(currently a consolidated subsidiary).

- 3 -

3. Description of business

In the field of home entertainment, Nintendo Co., Ltd., its subsidiaries and associates (composed of 27 subsidiaries and five associates as of March 31, 2020), primarily engage in the development, manufacture and sale of entertainment products. Nintendo's major products are categorized into computer-enhanced "dedicated video game platforms," playing cards, karutaand 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 and associates, manufactured by Nintendo Co., Ltd. and distributed primarily by its subsidiaries and associates in Japanese 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.
Sales

Nintendo 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.

- 4 -

4. Subsidiaries and associates

Consolidated subsidiaries

						Relationship with Nintendo Co., Ltd.
		Share capital		Percentage			(the "Company")
		Description	of voting	Concurrent positions
Name of company		or
Location	of principal	rights held	held by directors
Investments in
		capital	business	by the	Director	Employee	Loans	Business transactions	Leasing of
				Company	of the	of the			fixed assets
					Company	Company
					(number)	(number)
Nintendo of	U.S.	Thousands of	Sale	100	-	1	-	Purchasing products	-
America Inc. *1, 2	USD 110,000	manufactured by the
						Company
								Purchasing products
Nintendo of Canada	Canada	Thousands of	Sale	100	-	1	-	manufactured by the	-
Ltd.	CAD 4,000	(100)	Company from
					Nintendo of America
								Inc.
Nintendo of Europe	Germany	Thousands of	Sale	100	-	1	-	Purchasing products	-
GmbH *1, 2	EUR	manufactured by the
	30,000						Company
								Purchasing products
Nintendo France	France	Thousands of	Sale	100	-	1	-	manufactured by the	-
S.A.R.L. *1	EUR	Company from
	10,000						Nintendo of Europe
								GmbH
								Purchasing products
Nintendo Benelux	The	Thousands of	Sale	100	-	1	-	manufactured by the	-
B.V.	Netherlands	EUR	Company from
6,800						Nintendo of Europe
								GmbH
		Thousands of						Purchasing products
Nintendo Ibérica,	Spain	Sale	100	-	1	-	manufactured by the	-
S.A.	EUR	(100)	Company from
	3,000					Nintendo of Europe
								GmbH
		Millions of						Purchasing products
Nintendo RU LLC.			100				manufactured by the
Russia	RUB	Sale	-	-	-	Company from	-
(100)
		104					Nintendo of Europe

								GmbH
Nintendo Australia	Australia	Thousands of	Sale	100	-	1	-	Purchasing products	-
Pty Limited	AUD 8,500	manufactured by the
						Company
Nintendo of Korea	Korea	Millions of	Sale	100	-	4	-	Purchasing products	-
Co., Ltd. *1	KRW	manufactured by the
	25,000						Company
iQue (China) Ltd.		Thousands of		100				Entrusted
China	Development	-	2	-	development of	-
*1		USD 29,000		(100)				software
Nintendo								Entrusted
Technology	U.S.	USD 1	Development	100	1	1	-	development of	-
Development Inc.								hardware OS etc.
Nintendo Software		Thousands of						Entrusted
Technology	U.S.	Development	100	1	-	-	development of	-
Corporation		USD 20						software

Retro Studios, Inc.	U.S.	Thousands of	Development	100	1	-	-	Entrusted	-
*1	USD	development of
	10,001						software
								Purchase of products
								manufactured by the
Nintendo (Hong	China	Thousands of	Sale	100	-	3	-	Company and	-
Kong) Limited	HKD 49,300	entrusted purchase of
						parts for products
								manufactured by the
								Company
Nintendo European		Thousands of		100				Entrusted
Research and	France	EUR	Development	-	1	-	development of	-
(100)
Development SAS		300					software

									Leasing of

Nintendo Sales Co.,	Taito-ku,	Millions of	Sale	100	-	2	Granted	Purchasing products	buildings,
Ltd. *1, 2	Tokyo	JPY	manufactured by the	etc. owned
300						Company	by the
									Company

- 5 -

						Relationship with Nintendo Co., Ltd.
		Share capital		Percentage			(the "Company")

		Description	of voting	Concurrent positions
Name of company		or
Location	of principal	rights held	held by directors
Investments in
		capital	business	by the	Director	Employee	Loans	Business transactions	Leasing of
				Company	of the	of the			fixed assets
					Company	Company
					(number)	(number)
ND CUBE Co., Ltd.	Chuo-ku,	Millions of						Entrusted
JPY	Development	97	-	2	-	development of	-
	Tokyo	483						software

1-UP Studio Inc.	Chiyoda-ku,	Millions of						Entrusted
JPY	Development	100	-	3	-	development of	-
Tokyo
	90						software

MONOLITH	Meguro-ku,	Millions of	Development	97	-	2	-	Entrusted	-
SOFTWARE INC.	Tokyo	JPY	development of
75						software
									Leasing of
Mario Club Co.,	Higashiyama	Millions of	Development	100	-	5	-	Entrusted inspection	buildings
Ltd.	-ku, Kyoto	JPY	of software etc.	owned by
450						the
									Company
(Notes) 1. There are	six other consolidated subsidiaries not listed above.

Figures in parentheses in "Percentage of voting rights held by the Company" represent the proportion of indirect ownership.
Companies marked with *1 are specified subsidiaries.
Proportion of sales of consolidated subsidiaries marked with *2, excludinginter-company transactions of sales, over total sales on a consolidated basis surpasses 10%. Major financial information is as follows.

Name of company	Net sales	Ordinary profit	Profit	Total net assets	Total assets
(Millions of yen)	(Millions of yen)	(Millions of yen)	(Millions of yen)	(Millions of yen)

Nintendo of	524,235	30,392	22,778	318,493	482,167
America Inc.

Nintendo of	295,093	5,128	3,478	71,429	166,421
Europe GmbH

Nintendo Sales	226,512	10,691	7,369	23,334	74,751
Co., Ltd.


Name of company	Net sales	Ordinary profit	Profit	Total net assets	Total assets
(Millions of dollars)	(Millions of dollars)	(Millions of dollars)	(Millions of dollars)	(Millions of dollars)

Nintendo of	4,854	281	210	2,949	4,464
America Inc.

Nintendo of	2,732	47	32	661	1,540
Europe GmbH

Nintendo Sales	2,097	98	68	216	692
Co., Ltd.

Associates accounted for using equity method

						Relationship with the Company
				Percentage
		Share capital		Concurrent positions
Name of company	Location	or	Description	of voting	held by directors			Leasing of
Investments in	of principal	rights held	Director	Employee	Loans	Business transactions
		capital	business	by the	of the	of the	fixed assets
			Company
				Company	Company

					(number)	(number)
		Millions of	Sale and					Purchasing products
The Pokémon						manufactured by the
Minato-ku,	license of	32	1	-	-	-
Company	Tokyo	JPY	Pokémon	Company and entrusted
365					manufacturing of
			related goods					products

			Animation						Leasing of
		Millions of	production
							buildings
WARPSTAR, Inc.	Chiyoda-ku,	and					Entrusted management
JPY	50	-	3	-	owned by
Tokyo	intellectual	of merchandising rights
	10					the
		property
								Company
			management

			Development
PUX Corporation	Osaka City,	Millions of	of software					Entrusted development
JPY	engine and	27	-	1	-	-
Osaka	of software
	45	license

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

- 6 -

5. Employees

Segment information is omitted as Nintendo (the Company and its consolidated subsidiaries) operates as a single business segment.

(1) Information about group

				As of March 31, 2020
	Number of employees (persons)			6,200

	(Note) Number of employees means the number of persons employed, excluding persons seconded from the
	Company group to outside the Company group, but including persons seconded to the Company group
	from outside the Company group. It also includes part-time workers hired on a regular basis.
(2) Information about reporting company
				As of March 31, 2020
	Number of employees	Average age	Average length of service	Average annual salary
	(persons)	(years)	(years)	(yen)

2,395	39.2	13.9	9,350,972
(USD 86,583)

(Notes) 1. Number of employees means the number of persons employed, excluding persons seconded from the Company to outside the Company, but including persons seconded to the Company from outside the Company.

2. Average annual salary is the amount paid inclusive of tax in the fiscal year ended March 31, 2020, including extra wages and bonuses.
Labor unions

Labor unions do not exist in the Company but have been formed in some of its consolidated subsidiaries. Labor- management relations have been good, and there are no particular matters to be noted.

- 7 -

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, 2020.

(1) Basic management policy

As a company that creates entertainment to bring smiles to people's faces, 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 of entertainment 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 and increasing profit. Because Nintendo deals with entertainment products and content that naturally hold many uncertainties in terms of research and development, we have not set any specific management index targets. This allows our corporate decision-making to stay flexible in this highly competitive industry.

Management environment, mid tolong-term corporate business strategy and priority business and financial issues to address

In the market environment surrounding the Company group, the advancement of the Internet and social media is bringing about dramatic changes in the lifestyles of people around the world. Against the backdrop of the spread of smart devices, the "gaming population"is expanding rapidly beyond the bounds of the Company group's past initiatives.

Amid such changes in the environment, the Company group is seeking to deliver its entertainment to a wider range of consumers than ever before by recognizing Nintendo IP (including characters and worlds from its games) as its strength, in addition to developing integrated hardware-software products.

The Company group's fundamental strategy is to expand the number of people who have access to Nintendo IP. We will develop unique products and services that are overwhelmingly fun to play and whose appeal is easy to understand at a glance. In addition, we will make active use of Nintendo IP to expand the scope and scale of entertainment we offer. We will promote business that capitalizes on the Nintendo Account to build long-term relationships with consumers.

In accordance with this fundamental strategy, we will keep our dedicated video game platform business at the core of our operations and continue to take challenges to offer products and services that everyone can enjoy, regardless of age, gender, or gaming experience. In addition, we will continue to expand the number of people who have access to Nintendo IP in areas other than the dedicated video game platform business. The mobile business is one of these target areas. We aim for expanding the scope of our business by creating opportunities for consumers to encounter Nintendo IP through smart devices, which have built an extensive installed base worldwide. In addition to the above, for the IP expansion business, we will increase the use of Nintendo characters in different areas through collaborations with our corporate partners, including theme park projects, film, and merchandising. By doing so, we intend to increase opportunities for consumers to see Nintendo IP in their everyday lives and enhance the value of Nintendo IP, the source of our competitive strength.

Through these efforts, we will pursue every possible business opportunity by offering Nintendo IP in a variety of different ways to consumers worldwide, and aim for achieving continual growth and adding value to our company.

We will continue to flexibly transform ourselves by adapting to changing times while constantly valuing the spirit 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 positively surprised and delighted by.

- 8 -

2. Risk factors

Listed below are the various risks that could significantly affect the Company group's operating results, share price and financial 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, 2020.

Risks around economic environment

Fluctuation in foreign exchange rates
Nintendo distributes its products globally with overseas sales accounting for more than 70% of its total sales, and the majority of monetary transactions are made in local currencies. In addition, the Company holds a substantial amount of assets in foreign currencies; 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 for financial reporting purposes. Therefore, if there are significant fluctuations in foreign exchange rates, Nintendo's financial position, operating results and cash flows could be adversely affected.
In order to reduce the influence of fluctuations in foreign exchange rates, Nintendo implements measures such as increasing purchases in foreign currencies.

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 be affected by trends in other segments of the entertainment field. If consumer preferences shift to other forms of entertainment, the video game market may shrink. The emergence of new competitors resulting from technological 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-scale companies doing business in the same industry or in other segments of the entertainment field. Furthermore, if Nintendo is unable to adapt to rapid structural changes or other changes, its financial position, operating results and cash flows could be adversely affected.
As a company that creates entertainment to bring smiles to people's faces, the Company group's fundamental strategy is to expand the number of people who have access to Nintendo IP (including characters and worlds from its games). We will develop unique products and services that are overwhelmingly fun to play and whose appeal is easy to understand at a glance. In addition, we will make active use of Nintendo IP to expand the scope and scale of entertainment we offer. We will promote business that capitalizes on the Nintendo Account to build long-term relationships with consumers and endeavor to expand our market share.
Development of new products
Despite the substantial costs and time needed for development of software for dedicated video game platforms 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.
While development of hardware is time-consuming, with technology continuously advancing, the Company may not be able to equip technologies required for entertainment. Furthermore, delays of hardware launches could adversely affect market share.
Furthermore, due to the nature of Nintendo products and services, it may become difficult to develop, sell or launch the products and services as planned, development may be suspended or aborted, and the original plan could differ to a large extent.
In the field of computer entertainment, the development process is complicated and includes many uncertainties; therefore, if Nintendo is unable to deal with the above risks, its financial position, operating results and cash flows could be adversely affected.

Nintendo continuously strives to develop unique and attractive products.

Product valuation and adequate inventory procurement
Given that products in the video game industry have relatively short life cycles, and are significantly impacted by consumers' preferences as well as seasonality, excess inventory and obsolete inventory could have an adverse effect on Nintendo's financial position, operating results and cash flows.
Business opportunities could be missed if supply to the market falls short of the necessary quantity due to difficulties in accurately forecasting demand. At Nintendo, projected production is conducted in order to guarantee supply based on forecasted demand.
- 9 -

Dependency on outside manufacturers
Nintendo commissions outside manufacturers to produce key components or assemble finished products. In the event one or more of these businesses fail, Nintendo may have difficulty procuring key components or manufacturing its products. In addition, suppliers may be unable to provide necessary components 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, societal violence, natural disasters or any other accidents in the area could interrupt production and negatively affect Nintendo's operating performance.
Regarding production, Nintendo hedges risks by procuring parts and materials from and outsourcing production to multiple companies in most cases. For crucial components, we have identified all processes, places of production, persons in charge, etc. and have a management system in place which, even in the unlikely event of an unforeseeable incident, will enable us to get a grasp of the status of damage caused by the accident and take an alternative action as swiftly as possible.
Business operations affected by seasonal fluctuation
Demand for Nintendo's products is largely focused on the holiday season. Should Nintendo fail to release 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 of digital software and service provision via Internet servers, in addition to providing information via the Internet. However, in the event of the termination or destruction of the systems, or the leakage or unauthorized use of data, etc. as a result of 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.
Considering that networking functions are becoming increasingly important in the Company's business, Nintendo is enhancing assigned in-house resources, hiring necessary human resources, collaborating with outside expert firms and making other such efforts to strengthen its capabilities to deal with problems in systems.
Various factors affecting business activities
In addition to Japan, Nintendo engages in business in the United States, Europe, Australia, Asia and other areas in the world. Domestic and overseas business activities involve risks such as disadvantages from emergence of political or economic factors, disadvantages from inconsistency of multilateral taxation systems and diversity of tax law interpretation, difficulty in recruiting and securing human resources, and social disruption resulting from terror attacks, war and other catastrophic events.
Nintendo will take necessary measures on an ongoing basis.

Risks around legal regulations and litigation

Product liability
Nintendo develops and manufactures its products in accordance with applicable safety and quality control standards in locations of sale. However, large-scale product recalls may occur in the unlikely event of discovery of defective products, given that its products are sold worldwide. Also, the defect of a product may lead to product reimbursement compensation resulting in additional expenses, and Nintendo's reputation as well as its operating performance and financial position may suffer.
With full awareness of product liability, Nintendo will continue to proactively work on quality control and quality assurance of products in terms of design, manufacturing and ancillary services.
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 and financial position in the future.
Nintendo will take necessary measures on an ongoing basis.
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 or confidential information were ever leaked outside of Nintendo, due to breach or other unauthorized access or disclosure, it could have an adverse effect on Nintendo's future operating performance, share price and financial condition. Nintendo will take necessary measures on an ongoing basis.
- 10 -

Changes in laws and regulations
Unpredicted enforcement of or changes in laws and regulations, as well as adoptions of or changes in accounting standards or taxation systems could have an effect on Nintendo's performance and financial position. Conflict of views between Nintendo and the tax authorities may cause additional tax costs.
Nintendo keeps up-to-date with information released by government agencies and other external organizations through websites, etc. In addition, Nintendo collects information by participating in seminars hosted by external organizations and subscribing to specialized journals, etc. and conducts various studies in the lead up to the implementation of changes in laws and regulations, etc.
Litigation
Nintendo's operations in Japan and overseas may be subject to litigation, disputes and other legal procedures, which could adversely affect Nintendo's operating performance and financial position.
Nintendo is taking various measures to reduce the risk of litigation.

Spread ofCOVID-19

In terms of production and shipping, product supply may be impacted if issues involving the procurement of necessary components persist. In terms of sales, sales channels may be restricted by measures to prevent the spread of the virus including restrictions on movement outside the home and closure of retail stores. Development schedules may be impacted due to the difference in development environment between working from home and in the office since teleworking is implemented at the Company and its partners. As a result, we may not be able to proceed with the release of Nintendo products and the start of services as planned.

Nintendo will continue to conduct business operations by taking necessary measures so that it can continue to provide an environment in which consumers can enjoy its products and services, while giving due consideration to the health and safety of its consumers and employees.

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, impairment of the corporate brand or natural disasters due to unforeseen circumstances may adversely affect Nintendo's operating performance and financial position.

Nintendo will take necessary measures on an ongoing basis.

- 11 -

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, 2020 ("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 of the end of the fiscal year ended March 31, 2020.

Segment information is omitted as Nintendo operates as a single business segment.

(1) Assumptions used in 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. Management sets appropriate assumptions based on 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 these estimates. In particular, there are many uncertainties concerning COVID-19, however, the impact on the consolidated financial statements is negligible, based on the assumption that on a full-year basis, Nintendo will be able to carry out production and sales according to demand and release software under development as planned. Main estimates are inventories, deferred tax assets, etc. Important accounting procedures adopted in the consolidated financial statements of Nintendo are detailed in the section "V. Financial Information, Consolidated financial statements, etc., Significant matters forming the basis of preparing the consolidated financial statements."

Operating results, etc.

Description and analysis of results

For the fiscal year ended March 31, 2020, Nintendo Switch Lite launched in September as a compact, lightweight, and easy-to-carry dedicated handheld system, and Nintendo Switch performed very well without losing momentum, resulting in significant sales growth for the entire Nintendo Switch family. Looking at software, Pokémon Swordand Pokémon Shieldbecame big hits, posting sales of 17.37 million units, and Animal Crossing: New Horizons, released in March, sold 11.77 million units, which is now the best start ever for a Nintendo Switch title. In addition to titles like Luigi's Mansion 3and Super Mario Maker 2that were released during this fiscal year, sales also continued to grow steadily for popular titles released in previous fiscal years and for titles from other software publishers. The total number of million-seller titles during this fiscal year reached 27 titles, including those from other software publishers. Nintendo Switch also launched in China through Tencent Holdings Limited in December.

Because of COVID-19, production and shipments of the Nintendo Switch console, accessories like the Joy-Con controllers, and Ring Fit Adventurefaced delays in some regions from February through March, but this only had limited impact on sales for this fiscal year.

As a result, sales of both hardware and software exceeded last year's good results. In terms of volume, hardware sales for this fiscal year totaled 21.03 million units (24.0% increase on a year-on-year basis), and software sales totaled 168.72 million units (42.3% increase on a year-on-year basis).

For Nintendo 3DS, hardware sales totaled 0.69 million units (73.0% decrease on a year-on-year basis), and software sales totaled 4.99 million units (62.3% decrease on a year-on-year basis).

Turning to our digital business for dedicated video game platforms, in addition to the strong sales of downloadable versions of packaged software for Nintendo Switch, the steady growth in sales of download-only software and add-on content, and the contribution from Nintendo Switch Online throughout the year all helped to bring overall digital sales to ¥204.1 billion (USD 1,889 million; 71.8% increase on a year-on-year basis).

For the mobile business, many consumers continue to enjoy applications released during this fiscal year, such as Mario Kart Tour, as well as titles that were released in previous fiscal years. Our mobile, IP related income reached ¥51.2 billion (USD 474 million; 11.5% 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

- 12 -

Overview, 3. Analysis of financial position, operating results and cash flow by the management, (4) Factors which have a significant impact on operating results, etc."

(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, 2020 increased from the previous fiscal year.

Net sales reached ¥1,308.5 billion (USD 12,115 million; 9.0% increase on a year-on-year basis), of which overseas sales were ¥1,007.3 billion (USD 9,326 million; 7.8% increase on a year-on-year basis, and 77.0% of total sales). Operating profit came to ¥352.3 billion (USD 3,262 million; 41.1% increase on a year-on-year basis). Ordinary profit was ¥360.4 billion (USD 3,337 million; 30.0% increase on a year-on-year basis) due to increase in operating profit and other factors, and profit attributable to owners of parent totaled ¥258.6 billion (USD 2,394 million; 33.3% increase on a year-on-year basis).

Because of the effect of COVID-19 infection, production and shipments of dedicated video game platforms, etc. faced delays in some regions, but this only had limited impact on business results for this fiscal year.

(Net sales and operating profit)

Net sales increased from the previous fiscal year by ¥107.9 billion (USD 999 million) to ¥1,308.5 billion (USD 12,115 million; an increase of 9.0% on a year-on-year basis), primarily due to the brisk sales of Nintendo Switch. Gross profit increased from the previous fiscal year by ¥140.5 billion (USD 1,300 million) to ¥641.7 billion (USD 5,941 million; an increase of 28.0% on a year-on-year basis). Due to such factors as the increase in research and development expenses, as well as the increase in sales commission in association with the increase in net sales, selling, general and administrative expenses increased from the previous fiscal year by ¥37.8 billion (USD 350 million), resulting in an operating profit of ¥352.3 billion (USD 3,262 million; an increase of 41.1% on a year-on-year basis).

(Non-operating income and expenses, and ordinary profit)

Net non-operating income was ¥8.0 billion (USD 74 million), due to such factors as interest income and the share of profit of entities accounted for using equity method related to The Pokémon Company and other investments, offsetting foreign exchange losses incurred. As a result, ordinary profit was ¥360.4 billion (USD 3,337 million; an increase of 30.0% on a year-on-year basis).

(Profit attributable to owners of parent)

Profit attributable to owners of parent was ¥258.6 billion (USD 2,394 million; an increase of 33.3% on a year- on-year basis), mainly due to the increase in ordinary profit from the previous fiscal year.

Description and analysis of financial position (Total assets)

Total assets increased by ¥243.7 billion (USD 2,256 million) compared to the previous fiscal year-end to ¥1,934.0 billion (USD 17,907 million).

This was mainly due to the increase in cash and deposits attributable to such factors as the receipt of proceeds through operating activities, in addition to some of them being held in the form of short-term and long-term investment securities.

(Total liabilities)

Total liabilities increased by ¥117.6 billion (USD 1,088 million) compared to the previous fiscal year-end to ¥393.1 billion (USD 3,639 million).

This was mainly due to the increase in notes and accounts payable - trade by ¥38.3 billion (USD 354 million) attributable to such factors as purchases through operating activities, as well as the increase in other current

- 13 -

liabilities including advances received associated with digital business expansion, etc. by ¥68.0 billion (USD 629 million).

(Net assets)

Net assets increased by ¥126.1 billion (USD 1,167 million) compared to the previous fiscal year-end to ¥1,540.9 billion (USD 14,267 million).

This was mainly due to the increase in retained earnings owing to such factors as the posting of profit attributable to owners of parent in the amount of ¥258.6 billion (USD 2,394 million), offsetting the payment of dividends of surplus in the amount of ¥108.4 billion (USD 1,003 million).

(iv) Description and analysis of cash flows

The ending balance of "Cash and cash equivalents" (collectively, "Cash") as of March 31, 2020 was ¥621.4 billion (USD 5,753 million), with an increase of ¥36.0 billion (USD 333 million) during the fiscal year. During the previous fiscal year, there was an increase of ¥100.8 billion. Net increase (decrease) of Cash and contributing factors during the fiscal year ended March 31, 2020 are as follows:

Cash flows from operating activities:

There were decreasing factors contributing to ¥361.2 billion (USD 3,344 million) of profit before income taxes such as an increase in payments of income taxes and notes and accounts payable - trade. However, due to increasing factors such as a decrease in inventories and an increase in trade payables, net cash resulted in an increase of ¥347.7 billion (USD 3,219 million) compared to an increase of ¥170.5 billion during the previous fiscal year.

Cash flows from investing activities:

Net cash from investing activities decreased by ¥188.4 billion (USD 1,744 million) compared to an increase of ¥45.3 billion during the previous fiscal year mainly due to proceeds from withdrawal of time deposits and sales and redemption of short-term and long-term investment securities being lower than payments into time deposits and purchase of short-term and long-term investment securities.

Cash flows from financing activities:

Net cash from financing activities decreased by ¥111.0 billion (USD 1,027 million) compared to a decrease of ¥109.0 billion during the previous fiscal year mainly due to payments of cash dividends.

(3) Production, orders received and sales information

(i) Production results

Production results in the fiscal year ended March 31, 2020 were as follows. As Nintendo operates as a single business segment, the information is presented by product type.

Type	Amount	Year-on-year increase (decrease)
(Millions of yen)	(Millions of dollars)	(%)

Dedicated video game platform
Nintendo 3DS platform	5,446	50	(88.0)
Nintendo Switch platform	1,020,819	9,452	11.1
Others	8,420	77	(80.4)
Subtotal
1,034,686	9,580	2.8

Playing cards, etc.	650	6	13.4

Total	1,035,336	9,586	2.8

(Note) The above amounts are calculated based on the selling price and do not include consumption taxes.

- 14 -

(ii) Order-receiving status

Information on orders received is omitted as production is based on make-to-stock production, other than make- to-order production mainly for some software for dedicated video game platforms.

(iii) Sales results

Sales results in the fiscal year ended March 31, 2020 were as follows. As Nintendo operates as a single business segment, the information is presented by product type.

Type	Amount	Year-on-year increase (decrease)
(Millions of yen)	(Millions of dollars)	(%)

Dedicated video game platform
Nintendo 3DS platform	18,056	167	(71.4)
Nintendo Switch platform	1,219,327	11,290	18.6
Others	16,777	155	(72.8)
Subtotal
1,254,162	11,612	8.8

Mobile, IP related income, etc.	51,295	474	11.5

Playing cards, etc.	3,062	28	57.1

Total	1,308,519	12,115	9.0

(Note) The above amounts do not include consumption taxes.

Factors which have a significant impact on operating results, etc.
Nintendo operates as a business in the field of home entertainment, in which the existence of hit products and their sales volumes may have a significant impact on its operating results, etc. In addition, the field of entertainment is wide in scope, and any non-gaming propositions which gain popularity that provide consumers with more entertainment 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 carried out in local currencies. While Nintendo has attempted to increase dollar-based purchases in order to reduce the impact 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 such as risks attributable to the spread of COVID-19 as described in "II. Business Overview, 2. Risk factors."
Financial source of capital and liquidity of funds
The current ratio at March 31, 2020 is 422%, 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 business environment 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 growth, including capital investments. Nintendo ensures self-financing by cash flows from operating activities including sales of dedicated video game platforms, etc. Nintendo's approach to shareholder returns is as explained in "IV. Profile of the Company, 3. Dividend policy" and specific plans for capital investments are as described in "III. Equipment and Facilities, 3. Plans for new installation and retirement of equipment and facilities, etc."
- 15 -

During the launch periods of new products and the year-end sales season, there may be temporary increases in notes and accounts receivable - trade, notes and accounts payable - trade and inventories, which may have a downward or upward impact on net cash provided by or used in operating activities.

Payments into or withdrawals from time deposits with maturities of more than three months, as well as timing of acquisition or sale of short-term investment securities, may have an upward or downward impact on net cash provided by or used in investing activities.

4. Material contracts, etc.

Not applicable.

5. 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, development and operation of games that many people around the world can enjoy in the form of smart- device applications.

With respect to hardware, we continuously investigate and undertake research on fundamental technologies spanning data storage technology such as semiconductor memory, display technology such as liquid crystal displays, and electronic components, while we also carry out research and development activities to examine the applicability of various technologies including interfaces such as touch panels and sensors, wireless communication, networks, security, cloud computing, virtual reality, deep learning and big data analysis to the field of home entertainment. Our efforts are not limited to in-house studies and research in that we are also exploring various possibilities on a daily basis to discover technologies that will help create new ways to play by proactively turning our attention outside Nintendo. Moreover, we continue to enhance 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 and energy conservation initiatives.

With respect to software, we are focusing on taking full advantage of hardware features in planning our 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 system infrastructure 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 the planning 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 our manufacturing partners, continuously research and accumulate relevant technical know-how on mass production of components using new test methods and technologies, and also comply with relevant regulations.

Research and development expenses for the fiscal year were ¥84.1 billion (USD 778 million), with the outcomes of major research and development activities described below. Segment information is omitted since we operate as a single business segment.

For Nintendo Switch hardware, we not only launched a new model of Nintendo Switch with longer battery life, the dedicated handheld Nintendo Switch Lite, and various special hardware editions and color variations, but also updated the firmware and released accessories (e.g., Super Nintendo Entertainment System Controller, a carry case for Nintendo Switch Lite). We released compatible software including Ring Fit Adventure, a new endeavor that enables players to enjoy exercising while playing an adventure game by using the Ring-Con-aring-shaped controller made of special material that bounces back like a spring-and wearing the Leg Strap on the left thigh to recognize body movements, and Nintendo Labo: VR Kit, a new addition to the Nintendo Labo series. In terms of evergreen series, we released Animal Crossing: New Horizons, the latest installment in the Animal Crossing series in which players can enjoy life as they wish on a desert island while they experience time changes during the day in real-time as well as the changing of the seasons, in addition to Luigi's Mansion 3, Super Mario Maker 2, Fire Emblem: Three Houses, and Dr Kawashima's Brain Training for Nintendo Switch.

On the mobile business front, we released Dr. Mario World, a new action puzzle game based on the puzzle game, Dr. Mario, and Mario Kart Tour, a Mario Kart title that players can enjoy playing with one hand. For Mario Kart Tour, which is distributed in 163 countries and played even by consumers who do not normally play games on dedicated video game platforms, we introduced a multiplayer function in the update after its release, providing players with a means to invite their families and friends around them to play the game together. Following Mario Kart Tour, we launched a subscription service for Fire Emblem Heroesand Animal Crossing: Pocket Campand introduced a way

- 16 -

to enable an even wider range of consumers to continuously enjoy the game.

Furthermore, for Nintendo Account, an account necessary when using various services provided by Nintendo, we expanded the number of countries and regions where the services are available. In addition, we started offering Super NES - Nintendo Switch Online, which is packed with Super Nintendo Entertainment System games, and Super Kirby Clash, in which four Kirbys team up and engage in battle together. For Nintendo Switch Onlineapplications for smart devices, we continue to expand functions for Animal Crossing: New Horizons.

We further expanded the lineup for amiibo.

In addition, on Nintendo Developer Portal, a dedicated website for game creators working on Nintendo platforms, we offer ongoing 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.

Nintendo continues to engage in the development of new products for the future.

- 17 -

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, 2020, it invested ¥17,077 million (USD 158 million), which was mainly used for research and development 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 external financing. Segment information is omitted as Nintendo operates as a single business segment.

2. Major facilities

Major facilities are as follows. As Nintendo (the Company and its consolidated subsidiaries) operates as a single business segment, the information is presented on a business-by-business basis.

(1) Reporting company

									As of March 31, 2020
				Book value (Millions of yen)
		Description
Principal places of business	Description of			Land					Number of
of	Buildings	Machinery,	(area:	Tools,
			employees
(Location)	business	equipment	thousands		Other	Total
and	equipment	furniture		(persons)
		& facilities	structures	and vehicles	of square	and fixtures
					meters)

Uji Plant	Manufacturing	Production	2,434	118	1,866	74		4	4,499	121
(Uji City, Kyoto Prefecture)	facilities	(25)


Head Office	Administration,	Other
(Minami-ku, Kyoto	sales,	17,652	51	17,160	1,641		9,366	45,873	2,153
Prefecture)	development,	facilities			(57)
manufacturing

Tokyo Branch Office *1	Administration,	Other	0	-	2,996	0		0	2,997	6
(Taito-ku, Tokyo)	sales	facilities	(1)

Asset leased to Nintendo		Other			4,079
Sales Co., Ltd.	Sales	994	0	8		-	5,082	-
(Uji City, Kyoto Prefecture)		facilities			(9)


Asset leased to Nintendo		Other			5,763
Sales Co., Ltd.	Sales	743	-	6		-	6,513	-
(Kita-ku, Osaka Prefecture)		facilities			(1)



				Book value (Millions of dollars)
		Description
				Land					Number of
Principal places of business	Description of	of	Buildings	Machinery,	(area:	Tools,
	Other	Total	employees
(Location)	business	equipment	and	equipment	thousands	furniture		(persons)
		& facilities	structures	and vehicles	of square	and fixtures
					meters)

Uji Plant	Manufacturing	Production	22	1	17	0		0	41	121
(Uji City, Kyoto Prefecture)	facilities	(25)


Head Office	Administration,	Other
(Minami-ku, Kyoto	sales,	163	0	158	15		86	424	2,153
Prefecture)	development,	facilities			(57)
manufacturing

Tokyo Branch Office *1	Administration,	Other	0	-	27	0		0	27	6
(Taito-ku, Tokyo)	sales	facilities	(1)

Asset leased to Nintendo		Production			37
Sales Co., Ltd.	Sales	9	0	0		-	47	-
(Uji City, Kyoto Prefecture)		facilities			(9)


Asset leased to Nintendo		Other			53
Sales Co., Ltd.	Sales	6	-	0		-	60	-
(Kita-ku, Osaka Prefecture)		facilities			(1)


(Notes) 1. Book value	of "Other" means book value of intangible assets and long-term prepaid expenses.

The above amounts do not include consumption taxes.
*1 The amounts include some of the assets leased to Nintendo Sales Co., Ltd.
- 18 -

(2) Overseas subsidiaries

As of March 31, 2020

				Book value (Millions of yen)
		Description
				Land				Number of
Company name	Description of	of	Buildings	Machinery,	(area:	Tools,
	Other	Total	employees
(Location)	business	equipment	and	equipment	thousands	furniture	(persons)
		& facilities	structures	and vehicles	of square	and fixtures
					meters)

Nintendo of America Inc.	Sales	Other	11,897	923	3,378	1,934	4,860	22,995	1,191
(United States)	facilities	(508)


Nintendo of Europe GmbH	Sales	Other	983	228	-	337	1,865	3,415	868
(Germany)	facilities	(-)



				Book value (Millions of dollars)
		Description
Company name	Description of			Land				Number of
of	Buildings	Machinery,	(area:	Tools,
	Other	Total	employees
(Location)	business	equipment	and	equipment	thousands	furniture	(persons)
		& facilities	structures	and vehicles	of square	and fixtures
					meters)

Nintendo of America Inc.	Sales	Other	110	8	31	17	45	212	1,191
(United States)	facilities	(508)


Nintendo of Europe GmbH	Sales	Other	9	2	-	3	17	31	868
(Germany)	facilities	(-)


(Notes) 1. Book value	of "Other" means book value of construction in progress and intangible assets.

2. The above table excludes a building leased by Nintendo of Europe GmbH as a major facility leased from an entity outside the Company group.

3. 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/sale of 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."

		Description of	Planned investment amount		Year/month of	Year/month of
Company name					scheduled
	equipment and facilities	Total amount	Amount already paid	commencement
			(Millions of yen)	(Millions of yen)		completion
Nintendo Co., Ltd.		Research and	15,000		6,699
and its
	development		April 2019	March 2022
consolidated		(USD 138 million)	(USD 62 million)
	facilities
subsidiaries

Nintendo Co., Ltd.
and its		Production facilities	9,000		275	April 2019	March 2022
consolidated		for molds, etc.	(USD 83 million)	(USD 2	million)

subsidiaries
Nintendo Co., Ltd.		Renovation,	18,000		10,103
and its
	updating, etc. of		April 2019	March 2022
consolidated		(USD 166 million)	(USD 93	million)
	other buildings, etc.
subsidiaries

	Total	42,000		17,077	-	-
	(USD 388 million)	(USD 158 million)

(Notes) 1. Funds required for equipment	and facilities, etc. in the future in the amount of ¥24,923 million (USD 230 million)
referred to above are to be self-financed.

2. The above amounts do not include consumption taxes.

19 -

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

	Number of shares	Number of shares	Name of stock exchange on
	outstanding as of
	outstanding as of the end	which Nintendo is listed or	Description
Class	issuance date of this
of fiscal year	name of authorized financial
	report
	(March 31, 2020)	instruments firm association
	(June 29, 2020)

			Tokyo Stock Exchange	Number of shares
Common shares	131,669,000	131,669,000	constituting a unit: 100
(First Section)
			shares

Total	131,669,000	131,669,000	-	-

Status of share subscription rights and other relevant matters
1. Description of stock option scheme

Not applicable

Description of rights plans Not applicable
Other matters regarding status of share subscription rights, etc. Not applicable

Exercise status and other relevant matters concerning bonds with share subscription rights containing a clause for exercise price adjustment

Not applicable

(4) Trend of total number of shares issued, amount of common shares and other relevant matters

	Change in the	Balance of the	Change in share	Balance of share	Change in legal	Balance of legal
	number of	number of	capital	capital	capital surplus	capital surplus
Date	shares issued	shares issued
(Millions of	(Millions of	(Millions of	(Millions of
	(thousand	(thousand
	yen)	yen)	yen)	yen)
	shares)	shares)

March 29, 2019	(10,000)	131,669	-	10,065	-	11,584


	Change in the	Balance of the	Change in share	Balance of share	Change in legal	Balance of legal
	number of	number of	capital	capital	capital surplus	capital surplus
Date	shares issued	shares issued
(Millions of	(Millions of	(Millions of	(Millions of
	(thousand	(thousand
	dollars)	dollars)	dollars)	dollars)
	shares)	shares)

March 29, 2019	(10,000)	131,669	-	93	-	107

(Note) The decrease is due to the cancellation of treasury shares.

- 20 -

(5) Status of shareholders

As of March 31, 2020

		Status of shares (number of shares constituting a unit: 100 shares)		Status of

Classification	National	Financial	Financial	Other legal	Foreign shareholders	Individuals		shares less
	and local	services	Other than		Total	than one unit
	government	institutions	providers	entities	individuals	Individuals	and other		(shares)

Number of
shareholders	-	87	72	642	1,105	89	35,780	37,775	-
(persons)

Number of
shares held	-	364,949	27,582	45,857	670,461	337	205,739	1,314,925	176,500
(units)

Shareholding	-	27.75	2.10	3.48	50.99	0.03	15.65	100.00	-
ratio (%)

(Note) 1. Out of treasury shares of 12,545,354 shares, 125,453 units and 54 shares are included in "Individuals and other" and "Status of shares less than one unit," respectively.

2. "Other legal entities" includes one unit of shares held in the name of Japan Securities Depository Center, Incorporated.

- 21 -

(6) Status of major shareholders

			As of March 31, 2020
		Number of	Shareholding ratio
		shares held
Shareholder name	Address	(excluding treasury shares)
(Hundreds of
		(%)
		shares)

The Master Trust Bank of Japan, Ltd.	2-11-3Hamamatsu-cho,Minato-ku, Tokyo	76,561	6.43
(Trust Account)

JP Morgan Chase Bank 385632	25 BANK STREET, CANARY WHARF,
(Standing proxy: Settlement &
LONDON, E14 5JP, UNITED KINGDOM	75,263	6.32
Clearing Services Department,
(2-15-1 Konan, Minato-ku, Tokyo)
Mizuho Bank, Ltd.)


Japan Trustee Services Bank, Ltd.	1-8-11 Harumi, Chuo-ku, Tokyo	56,781	4.77
(Trust Account)

The Bank of Kyoto, Ltd.	700 Yakushimae-cho,Karasuma-dori,
(Standing proxy: Trust & Custody	Matsubara-Agaru,Shimogyo-ku, Kyoto	48,802	4.10
Services Bank, Ltd.)	(1-8-12 Harumi, Chuo-ku, Tokyo)
The Nomura Trust and Banking Co.,
Ltd.	2-2-2 Otemachi, Chiyoda-ku, Tokyo	42,109	3.53
(MUFG Bank, Ltd. Retiree Allowance

Trust Account)
State Street Bank and Trust Company	12 NICHOLAS LANE LONDON EC4N
505010
7BN U.K.	26,141	2.19
(Standing proxy: Custody Services
(3-11-1 Nihonbashi, Chuo-ku, Tokyo)
Department, HSBC Tokyo Branch)


Japan Trustee Services Bank, Ltd.	1-8-11 Harumi, Chuo-ku, Tokyo	24,978	2.10
(Trust Account 5)

SSBTC CLIENT OMNIBUS	ONE LINCOLN STREET, BOSTON MA
ACCOUNT
USA 02111	22,545	1.89
(Standing proxy: Custody Services
(3-11-1 Nihonbashi, Chuo-ku, Tokyo)
Department, HSBC Tokyo Branch)


JP Morgan Chase Bank 385151	25 BANK STREET, CANARY WHARF,
(Standing proxy: Settlement &
LONDON, E14 5JP, UNITED KINGDOM	20,632	1.73
Clearing Services Department,
(2-15-1 Konan, Minato-ku, Tokyo)
Mizuho Bank, Ltd.)


Japan Trustee Services Bank, Ltd.	1-8-11 Harumi, Chuo-ku, Tokyo	18,464	1.55
(Trust Account 7)

Total	―	412,278	34.61

(Notes) 1. The Company's 125,453 hundred treasury shares are excluded from the above table.

2. Although the Statement of Changes made available for public inspection dated March 6, 2020 states that the following shares are held by Capital Research and Management Company and its joint holders as of February 28, 2020, the above status of major shareholders is based on the shareholder registry, as the Company could not confirm the actual number of shares held as of March 31, 2020.

		Number of	Shareholding ratio
		shares held
Shareholder name	Address	(excluding treasury shares)
(Hundreds of
		(%)
		shares)

Capital Research and Management	333 South Hope Street, Los	81,616	6.20
Company	Angeles, California, USA


Capital International K.K.	2-1-1 Marunouchi, Chiyoda-	1,323	0.10
ku, Tokyo 1


Total	―	82,939	6.30

- 22 -

3. Although the Statement of Changes made available for public inspection dated April 16, 2018 states that the following shares are held by MUFG Bank, Ltd. and its joint holders as of April 9, 2018, the above status of major shareholders is based on the shareholder registry, as the Company could not confirm the actual number of shares held as of March 31, 2020.

The total number of shares issued decreased by 10,000,000 shares to 131,669,000 shares due to the cancellation of treasury shares on March 29, 2019 in accordance with the resolution at the Board of Directors' meeting held on February 22, 2019; however, the shareholding ratio in the Statements of Large-Volume Holdings (Statement of Changes) submitted before said date is stated as the ratio before the cancellation of treasury shares.

		Number of	Shareholding ratio
		shares held
Shareholder name	Address	(excluding treasury shares)
(Hundreds of
		(%)
		shares)

MUFG Bank, Ltd.	2-7-1 Marunouchi, Chiyoda-	55,752	3.94
ku, Tokyo


Mitsubishi UFJ Trust and Banking	1-4-5 Marunouchi, Chiyoda-	30,173	2.13
Corporation	ku, Tokyo


Mitsubishi UFJ Kokusai Asset	1-12-1 Yurakucho, Chiyoda-	5,231	0.37
Management Co., Ltd.	ku, Tokyo


Mitsubishi UFJ Morgan Stanley	2-5-2 Marunouchi, Chiyoda-	3,953	0.28
Securities Co., Ltd.	ku, Tokyo


Total	―	95,109	6.71

- 23 -

4. Although the Statements of Large-Volume Holdings made available for public inspection dated March 22, 2017 states that the following shares are held by BlackRock Japan Co., Ltd. and its joint holders as of March 15, 2017, the above status of major shareholders is based on the shareholder registry, as the Company could not confirm the actual number of shares held as of March 31, 2020.

		Number of	Shareholding ratio
		shares held
Shareholder name	Address	(excluding treasury shares)
(Hundreds of
		(%)
		shares)

BlackRock Japan Co., Ltd.	1-8-3 Marunouchi, Chiyoda-	21,768	1.54
ku, Tokyo


BlackRock Advisors, LLC	1209 Orange Street,	6,892	0.49
Wilmington, New Castle

	County, Delaware, USA
BlackRock Investment Management	1 University Square Drive;	1,843	0.13
LLC	Princeton, New Jersey, USA


BlackRock (Luxembourg) S.A.	35a Avenue JF Kennedy L-	1,972	0.14
1855 Luxembourg.


BlackRock Life Limited	12 Throgmorton Avenue	2,453	0.17
London, UK


	JP Morgan House
BlackRock Asset Management	International Financial	4,460	0.31
Ireland Limited	Services Centre, Dublin,

	Ireland
BlackRock Fund Advisors	400 Howard Street, San	14,264	1.01
Francisco, California, USA


BlackRock Institutional Trust	400 Howard Street, San	17,501	1.24
Company, N.A.	Francisco, California, USA


BlackRock Investment Management	12 Throgmorton Avenue	2,017	0.14
(UK) Limited	London, UK


Total	―	73,172	5.17

- 24 -

(7) Status of voting rights

(i) Shares issued

				As of March 31, 2020
Class	Number of shares (shares)	Number of voting	Description
rights (units)

Shares without voting rights		-	-	-

Shares with restricted voting		-	-	-
rights (treasury shares, etc.)

Shares with restricted voting		-	-	-
rights (other)

Shares with full voting rights	(Treasury shares)
			Number of shares constituting
(treasury shares, etc.)	Common shares	12,545,300	-
				a unit: 100 shares
Shares with full voting rights	Common shares	118,947,200	1,189,472 Same as the above
(other)

Shares less than one unit	Common shares	176,500	-	Shares less than one unit (100
shares)

Total number of shares issued		131,669,000	-	-

Total number of voting rights held		-	1,189,472	-
by 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, 2020
		Number of shares	Number of shares	Total number of	Shareholding ratio over
Name of shareholder	Address of shareholder	held under own	held under another	the total number of
shares held (shares)
		name (shares)	name (shares)		shares issued (%)
(Treasury shares)
	11-1Hokotate-cho,
Nintendo Co., Ltd.	Kamitoba, Minami-	12,545,300	-	12,545,300	9.53
ku, Kyoto 601-8501

	Japan
Total	-	12,545,300	-	12,545,300	9.53

- 25 -

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

Status of acquisition based on a resolution approved at the General Meeting of Shareholders Not applicable
Status of acquisition based on a resolution approved by the Board of Directors

Not applicable

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

Treasury shares acquired during the fiscal year ended March 31,	1,090	43,282,550
2020


Treasury shares acquired during the current period	30	1,377,900


Classification	Number of shares (shares)	Total amount of acquisition price
(dollars)

Treasury shares acquired during the fiscal year ended March 31,	1,090	400,764
2020


Treasury shares acquired during the current period	30	12,758

(Note) The number of treasury shares acquired during the current period does not include shares less than one full unit purchased during the period from June 1, 2020 to the submission date of this report.

- 26 -

(4) Status of disposition and holding of acquired treasury shares

	Classification			Fiscal year ended March 31, 2020	From April 1 to May 31, 2020

			Number of shares	Total amount of	Number of shares	Total amount of
					(shares)	disposal price (yen)	(shares)	disposal price (yen)
Acquired	treasury	shares	for	which	-	-	-	-
subscribers were solicited

Acquired treasury shares that were retired	-	-	-	-

Acquired treasury shares that were
transferred in association with a merger,	-	-	-	-
share exchange or corporate split
Other					-	-	-	-


Number of treasury shares held			12,545,354	-	12,545,384	-


					Fiscal year ended March 31, 2020	From April 1 to May 31, 2020

	Classification			Number of shares	Total amount of	Number of shares	Total amount of
					(shares)	disposal price	(shares)	disposal price
					(dollars)	(dollars)

Acquired	treasury	shares	for	which	-	-	-	-
subscribers were solicited

Acquired treasury shares that were retired	-	-	-	-

Acquired treasury shares that were
transferred in association with a merger,	-	-	-	-
share exchange or corporate split
Other					-	-	-	-


Number of treasury shares held			12,545,354	-	12,545,384	-

(Note) The number of treasury shares held during the period from April 1 to May 31, 2020 does not include shares less than one full unit purchased or sold during the period from June 1, 2020 to the submission date of this report.

- 27 -

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 business environment and intensified competition. As for direct profit returns to our shareholders, dividends are paid based on 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 the Board 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% of consolidated 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 of outstanding 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, 2020, has been established at 1,090 yen (USD 10.09) (interim: 270 yen [USD 2.50], year-end: 820 yen [USD 7.59]).

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, 2020 are as follows.

Date of resolution	Total amount of dividend	Dividend per share

Resolved at the meeting of the Board	¥ 32,163 million	¥ 270
of Directors on October 31, 2019

Resolved at the Annual General
Meeting of Shareholders on June 26,	¥ 97,681 million	¥ 820
2020

Date of resolution	Total amount of dividend	Dividend per share

Resolved at the meeting of the Board	USD 297 million	USD 2.50
of Directors on October 31, 2019

Resolved at the Annual General
Meeting of Shareholders on June 26,	USD 904 million	USD 7.59
2020

- 28 -

4. Corporate governance

Outline of corporate governance
(i) Basic views on corporate governance
At Nintendo, we strive to maximize long-term, continuous corporate value while carefully considering the benefits for everyone we touch, including not only shareholders but also consumers, business partners, employees, local communities and other stakeholders. We are working to build a highly transparent and sound system of corporate governance, as well as improve our corporate ethics.

(ii) Outline of corporate governance system and reason for adoption of such system

The Company aims to strengthen the supervisory functions of the Board of Directors and further enhance the corporate governance system of the Company as a Company with an Audit and Supervisory Committee. The Company has also 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 business environment. The foregoing will be enabled by separating the management decision-making and supervisory functions from the execution of operations as well as by accelerating the delegation of authority to execute operations.

The Company's corporate governance system is as shown below.

(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) is one year, and the term of office of Directors who are Audit and Supervisory Committee Members is two years. The Board of Directors holds meetings once a month in principle, and deliberates important matters related to management in accordance with laws and regulations, etc. as the body in charge of management decision- making and supervision.

- 29 -

Board members:	Board chairperson Shuntaro Furukawa, Representative Director and President; Shigeru
	Miyamoto, Representative Director; Shinya Takahashi, Director; Ko Shiota, Director;
	Satoru Shibata, Director; Naoki Noguchi, Director (Full-Time Audit and Supervisory
	Committee Member); Katsuhiro Umeyama, Outside Director (Audit and Supervisory
	Committee Member); Masao Yamazaki, Outside Director (Audit and Supervisory
	Committee Member); and Asa Shinkawa, Outside Director (Audit and Supervisory
	Committee Member)

(Audit and Supervisory Committee)

The Audit and Supervisory Committee consists of one full-time internal Director and three Outside Directors, all of whom meet the standards for independent officers set forth by Tokyo Stock Exchange, Inc. The Audit and Supervisory Committee holds meetings once a month in principle, and deliberates matters provided for in laws and regulations, etc. as the body in charge of auditing the execution of duties, in addition to exchanging audit opinions.

Committee members: Committee chairperson Naoki Noguchi, Director (Full-Time Audit and Supervisory Committee Member); Katsuhiro Umeyama, Outside Director (Audit and Supervisory Committee Member); Masao Yamazaki, Outside Director (Audit and Supervisory Committee Member); and Asa Shinkawa, Outside Director (Audit and Supervisory Committee Member)

The Company has established the Audit and Supervisory Committee Office which assists the Audit and Supervisory Committee in performing its duties, and has appointed one dedicated staff member in the Office.

(Nomination Advisory Committee)

With the aim of increasing objectivity and transparency in the procedures for determining the nomination and compensation of Directors, etc., the Company has established the Nomination Advisory Committee, which consists of the Representative Director and President and all Directors who are Audit and Supervisory Committee Members. As a non-mandatory advisory body to the Board of Directors, the Nomination Advisory Committee deliberates matters related to the nomination and compensation of Directors, etc.

Committee members: Committee chairperson Katsuhiro Umeyama, Outside Director (Audit and Supervisory Committee Member); Shuntaro Furukawa, Representative Director and President; Naoki Noguchi, Director (Full-Time Audit and Supervisory Committee Member); Masao Yamazaki, Outside Director (Audit and Supervisory Committee Member); and Asa Shinkawa, Outside Director (Audit and Supervisory Committee Member)

(Executive Management Committee)

With the aim of promoting corporate activities strongly, the Company has established the Executive Management Committee consisting of Directors (excluding Directors who are Audit and Supervisory Committee Members). The Executive Management Committee holds meetings twice per month in principle and deliberates basic policies on matters to be proposed at the meetings of the Board of Directors and management-related business execution policies and various measures.

Committee members: Committee chairperson Shuntaro Furukawa, Representative Director and President; Shigeru Miyamoto, Representative Director; Shinya Takahashi, Director; Ko Shiota, Director; and Satoru Shibata, Director

(Compliance Committee)

With the aim of promoting compliance, the Company has established the Compliance Committee chaired by General Manager of General Affairs Division under the Executive Management Committee. The Compliance Committee performs initiatives for promotion of compliance including establishment of the "Compliance Manual." Committee members: Committee chairperson Kentaro Yamagishi, General Manager, General Affairs Division; general managers of divisions and general managers of departments/offices (sections not

placed under divisions)

Other matters related to corporate governance

Preparedness of risk management system
In the Company, 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 the 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.
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, the responsible divisions
- 30 -

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.

Summary of agreement on limitation of liability with Outside Directors
In accordance with Article 427, Paragraph 1 of the Companies Act, the Company has entered into an agreement with Outside Directors to limit their liability for damages as stipulated in Article 423, Paragraph 1 of the Companies Act. Pursuant to such agreement, the amount of liability for damages is limited to the amount specified by laws and regulations, and such liability limit will be recognized only when the Outside Director performed his/her duties that caused the liability in good faith and without gross negligence.
Number of Directors
The Articles of Incorporation stipulates that the number of Directors of the Company (excluding Directors who are Audit and Supervisory Committee Members) shall be no more than 15 persons, and the number of Directors who are Audit and Supervisory Committee Members shall be no more than five persons.
Requirements for resolution on election of Directors
The Company has stipulated in its Articles of Incorporation that: a resolution on the election of Directors shall be passed by the majority of the votes of the shareholders present at the meeting where the shareholders holding one-third or more of the votes of the shareholders entitled to vote are present; and the resolution on the election of Directors shall not be subject to cumulative vote.
Matters subject to resolution at General Meeting of Shareholders that can be resolved at Board of Directors meeting
(Acquisition of treasury shares)
The Company has stipulated in its Articles of Incorporation that, in order to execute capital policies in a flexible manner in response to changes in the business environment, the Company may acquire treasury shares subject to resolution of the Board of Directors pursuant to the provision of Article 165, Paragraph 2 of the Companies Act.
(Interim dividend)
The Company has stipulated in its Articles of Incorporation that, in order to return profits to shareholders in a flexible manner, the Company may pay an interim dividend to shareholders or registered pledgees of shares entered or recorded in the latest shareholder registry as at September 30 each year, subject to resolution of the Board of Directors.
Requirements for special resolution at General Meeting of Shareholders

The Company has stipulated in its Articles of Incorporation that, in order to fulfill the quorum for a special resolution at the General Meeting of Shareholders with greater certainty, the resolution provided for in Article 309, Paragraph 2 of the Companies Act shall be passed by two-thirds of the votes of the shareholders present at the meeting where the shareholders holding one-third or more of the votes of the shareholders entitled to vote are present.

(iv) 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 other acquisition 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 the common 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 the common 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 the offer, the Company will establish a task force to decide on whether any specific defensive measures are necessary. If the offer is deemed inimical 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 and regulations.

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.

- 31 -

Members of the Board of Directors

List of Members of the Board of Directors

Eight male Directors and one female Director (percentage of females: 11.1%)

Position/						Number of
Name	Date of birth		Past experience	Term	shares held
Job title
					(hundreds)

			April 1994	Joined the Company
			May 2012	Appointed as Outside Director of
				The Pokémon Company
			July 2015	General Manager, Corporate
				Planning Department
Representative	Shuntaro	January 10,	June 2016	Appointed as Director (to present)
Director		Appointed as Managing Executive	*1	2
	Furukawa	1972		Officer
President
			Supervisor of Corporate Analysis &
				Administration Division
			September 2016 In charge of Global Marketing
				Department
			June 2018	Appointed as Representative
				Director and President (to present)
			April 1977	Joined the Company
			June 2000	Appointed as Director (to present)
Representative				General Manager, Entertainment
Shigeru	November		Analysis & Development Division
Director
May 2002	Appointed as Senior Managing	*1	1
	Miyamoto	16, 1952
Fellow		Director

			Appointed as Representative

				Director (to present)
			September 2015 Appointed as Fellow (to present)
			April 1989	Joined the Company
			July 2012	Deputy General Manager, Software
Director				Planning & Development Division
		June 2013	Appointed as Director (to present)

Senior				General Manager, Software Planning
			& Development Division
Managing
		September 2015 General Manager, Entertainment
Executive
			Planning & Development Division
Officer	Shinya	November 9,
	(to present)	*1	1

General	Takahashi	1963		Supervisor of Development

			Administration & Support Division
Manager,
			(to present)
Entertainment
			Supervisor of Business Development
Planning &
			Division
Development
		June 2016	Appointed as Managing Executive
Division
			Officer

			June 2018	Appointed as Senior Managing
				Executive Officer (to present)
Director
Senior			April 1992	Joined the Company
Executive			September 2015	General Manager, Platform
Officer		August 7,		Technology Development Division
General	Ko Shiota		(to present)	*1	1
1969	June 2016	Appointed as Executive Officer

Manager,			June 2017	Appointed as Director (to present)
Platform				Appointed as Senior Executive
Technology				Officer (to present)
Development
Division

- 32 -

Position/						Number of
Name	Date of birth		Past experience	Term	shares held
Job title
					(hundreds)

			April 1985	Joined the Company
			February 1999	President of Nintendo Australia Pty
				Limited
Director			June 2000	President of Nintendo of Europe
			GmbH

Senior			June 2016	Appointed as Executive Officer
		May 2018	Appointed as Outside Director of
Executive
			The Pokémon Company (to present)
Officer
Satoru	September 4,	June 2018	Appointed as Director (to present)
	*1	1
General	Shibata	1962		Appointed as Senior Executive
	Officer (to present)
Manager,
			General Manager, Marketing
Marketing
			Division (to present)
Division and
			General Manager, Licensing
Licensing
			Division (to present)
Division
			In charge of Planning Department (to

				present)
				In charge of Global Marketing
				Department
			June 1980	Joined the Company
Director			May 2010	General Manager, Software Planning
			& Development Administration
(Full-time
			Department
Audit and	Naoki	February 8,
March 2014	Deputy General Manager, Human	*2	1
Supervisory	Noguchi	1954
	Resources Division
Committee
		June 2016	Appointed as Director as a Full-time
Member)
			Audit and Supervisory Committee

				Member (to present)
			March 1994	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)
Director			November 2005	Appointed as Outside Auditor of
			KURAUDIA Co., Ltd. (current
(Audit and	Katsuhiro	July 29,
	KURAUDIA HOLDINGS Co., Ltd.)
Supervisory		*2	-
Umeyama	1965	July 2009	Appointed as Representative Partner
Committee
			of Umeyama Certified Tax
Member)
			Accountant LLC (to present)

			June 2012	Appointed as Auditor of the
				Company
			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 Member
				of the Company (to present)
			April 1975	Joined Osaka Regional Taxation
				Bureau
			July 2010	Appointed as Director, Minato Tax
				Office, Osaka Regional Taxation
Director				Bureau
		July 2016	Appointed as Director, Higashi Tax
(Audit and	Masao	June 16,
	Office, Osaka Regional Taxation
Supervisory		*2	-
Yamazaki	1956		Bureau
Committee
		August 2017	Registered as certified tax accountant
Member)
		September 2017 Opened Masao Yamazaki Certified

				Tax Accountant Office
			June 2018	Appointed as Director as an Audit
				and Supervisory Committee Member
				of the Company (to present)

- 33 -

Position/							Number of
	Name	Date of birth		Past experience	Term	shares held
Job title
						(hundreds)

				April 1991	Registered as attorney-at-law
					Joined Nishimura & Sanada
					(currently Nishimura & Asahi)
				April 1997	Worked at Arnold & Porter
Director				January 1998	Registered as attorney-at-law in New
				York State, United States
(Audit and		Asa	February 17,	January 2001	Partner, Nishimura & Partners	*2	-
Supervisory		Shinkawa	1965		(currently Nishimura & Asahi) (to
Committee			present)

Member)				April 2019	Visiting Professor, The University of
					Tokyo Graduate Schools for Law
					and Politics (to present)
				June 2020	Appointed as Director as an Audit
					and Supervisory Committee Member
					of the Company (to present)
				Total			7
(Notes) 1.	Directors, Mr. Katsuhiro Umeyama, Mr. Masao Yamazaki and Ms. Asa Shinkawa 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, 2020, and expires at the close of the Annual General Meeting of Shareholders for the fiscal year ending March 31, 2021.
*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, 2020 and expires at the close of the Annual General Meeting of Shareholders for the fiscal year ending March 31, 2022.
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 can appropriately and swiftly respond to the rapidly changing business environment through the separation of the managementdecision-making and supervisory functions from the execution of operations, as well as by accelerating the delegation of authority to execute operations. Nine executive officers, excluding those who have the concurrent position as Director, are as follows.

Title	Name

Senior Executive Officer	Satoshi Yamato
President, Nintendo Sales Co., Ltd.

Senior Executive Officer	Hirokazu Shinshi
General Manager, Manufacturing Division

Senior Executive Officer
Deputy General Manager, Entertainment Planning &	Yoshiaki Koizumi
Development Division
Executive Officer
Senior Officer, Entertainment Planning & Development	Takashi Tezuka
Division
Executive Officer
General Manager, Finance Administration Division	Hajime Murakami
In charge of Investor Relations
Executive Officer	Yusuke Beppu
General Manager, Business Development Division

Executive Officer
General Manager, General Affairs Division	Kentaro Yamagishi
In charge of Quality Assurance Department
Executive Officer	Doug Bowser
President, Nintendo of America Inc.

Executive Officer	Stephan Bole
President, Nintendo of Europe GmbH

- 34 -

Status of outside officers

Status of appointment of Outside Directors

The Company has appointed three Outside Directors (all of whom are Audit and Supervisory Committee Members).

(b) Personal relationship, capital relationship, business relationship or other interests of Outside Directors There is no personal relationship, capital relationship, business relationship or any other interests between

Outside Directors and the Company. All Outside Directors have met the standards for independent officers prescribed by Tokyo Stock Exchange, Inc.

All Outside Directors of the Company have been appointed as Audit and Supervisory Committee Members to audit and supervise the execution of operations in an appropriate manner from an independent standpoint based on an objective viewpoint that is different from Directors who are from inside the Company.

Description of standards or policies on independence from the Company for appointment of Outside Directors The Company has not established specific standards or policies on the independence of Outside Directors but uses the criteria for determining the independence of independent officers prescribed in the "Guidelines Concerning Listing Examination, etc." of Tokyo Stock Exchange, Inc. as reference when appointing Outside Directors. In addition, importance is placed on whether or not they are capable of giving objective advice from an impartial standpoint, are of excellent caliber, and have expertise and experience.

Collaboration between supervision by Outside Directors and internal audits and audits by Audit and Supervisory Committee as well as accounting audits, and relationship with internal control division

In principle, the Company's Outside Directors attend not only Audit and Supervisory Committee meetings held

monthly but also audit briefings of the Accounting Auditor where they share opinions. Furthermore, at Audit and Supervisory Committee meetings, Outside Directors receive an explanation of the operational audits conducted in the month and the results of such audits from the full-time Audit and Supervisory Committee Members, and receive timely reports on the results of internal audits by the Internal Auditing Department.

Status of audits

Status of audits by Audit and Supervisory Committee

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 and Supervisory Committee as a general rule to share audit opinions. Furthermore, the full-time Audit and Supervisory Committee Member conducts fieldwork auditing over each division of the Company, etc., based on the annual audit plan. In collaboration with the internal auditing division, the Audit and Supervisory Committee receives timely reports on internal audit results from the Internal Auditing Department and exchanges opinions periodically. In collaboration with the Accounting Auditor, the Audit and Supervisory Committee witnesses physical inventory checks at the end of the period or receives reports on such physical inventory checks, witnesses accounting audits conducted on major subsidiaries, etc. and receives an explanation of the accounting audit plan and accounting audit results on a regular basis. The Audit and Supervisory Committee also exchanges information and opinions as necessary.

Among the Audit and Supervisory Committee Members, two Outside Directors are certified public accountants or certified tax accountants and have considerable financial and accounting knowledge.

In the fiscal year ended March 31, 2020, the Audit and Supervisory Committee held 13 meetings; the attendance status of each Audit and Supervisory Committee Member is as follows.

- 35 -

Classification	Name	Number of meetings held	Number of meetings attended

Director (Full-time Audit and Supervisory	Naoki Noguchi	13	13
Committee Member)

Director (Audit and Supervisory	Naoki Mizutani	13	13
Committee Member)

Director (Audit and Supervisory	Katsuhiro Umeyama	13	13
Committee Member)

Director (Audit and Supervisory	Masao Yamazaki	13	13
Committee Member)

(ii) Status of internal audits

For internal audits, the Internal Auditing Department of the Company consisting of eight members conducts operational audits with respect to the Company and its subsidiaries in view of the effectiveness and efficiency of operations, asset preservation status and compliance as a dedicated division that is independent of divisions that execute operations. In order to ensure the appropriateness and reliability of financial reporting, the Internal Auditing Department manages internal controls and assesses the implementation status of such controls in compliance with the Financial Instruments and Exchange Act. Furthermore, the respective divisions in charge of internal audit established in major subsidiaries collaborate with the Internal Auditing Department and divide auditing tasks between them. Similar audits, etc. are conducted centering on major subsidiaries.

(iii) Status of accounting audits

To the extent that investigation is possible, the Company confirmed that it had concluded an auditing agreement with PricewaterhouseCoopers Kyoto (formerly Hisaji Miyamura Office) on accounting audits pursuant to the Companies Act and the Financial Instruments and Exchange Act since 1962. In close collaboration with the Audit and Supervisory Committee Members and the Internal Auditing Department, the Accounting Auditor reports audit plans and audit results, exchanges necessary information and opinions even during the period, and conducts audits in an effective and efficient manner. The names of certified public accountants (CPAs) who performed the work and assistants engaged in audit work in the fiscal year ended March 31, 2020 were as follows.

CPAs who performed accounting audit work

Engagement Partner	Yukihiro Matsunaga
Engagement Partner	Keiichiro Kagi

Assistants engaged in accounting audit work: Five CPAs and 15 other persons

- Other persons are persons who passed the CPA examination, persons in charge of system auditing, etc.
Policy and reason for appointment of audit firm and evaluation of audit firm by Audit and Supervisory Committee
The Company's policy for determining the termination or nonrenewal of appointment of the Accounting Auditor

is: in the event that the Accounting Auditor is deemed to have met any of the grounds set forth in the clauses of Article 340, Paragraph 1 of the Companies Act, the Audit and Supervisory Committee shall terminate the appointment of the Accounting Auditor subject to the unanimous consent of the Audit and Supervisory Committee Members. In addition, should the Accounting Auditor be deemed unable to execute its duties properly or should the replacement of the Accounting Auditor be deemed reasonable in order to enhance the appropriateness of the audits, the Audit and Supervisory Committee shall determine the details of the proposal to terminate or not reappoint the Accounting Auditor for submission to the General Meeting of Shareholders.

The Audit and Supervisory Committee has acknowledged that the Accounting Auditor's audit methods and results are reasonable, having collected information on the Accounting Auditor's independence, audit system, audit implementation status, quality, etc. from the Company's accounting division, internal auditing division and the Accounting Auditor itself. The Audit and Supervisory Committee has also determined that it would be appropriate to reappoint PricewaterhouseCoopers Kyoto, having evaluated that PricewaterhouseCoopers Kyoto can be

- 36 -

expected to continue conducting appropriate audits, based on the policy for determining the termination or nonrenewal of appointment of the Accounting Auditor and other evaluation standards.

Compensation for audits, etc.

Breakdown of compensation for auditing CPAs, etc.

	Fiscal year ended March 31, 2019	Fiscal year ended March 31, 2020

Classification	Audit compensation	Non-audit compensation	Audit compensation	Non-audit compensation

	(Millions of yen)	(Millions of yen)	(Millions	(Millions	(Millions	(Millions
	of yen)	of dollars)	of yen)	of dollars)

Reporting company	83	1	82	0	―	―

Consolidated subsidiaries	35	5	37	0	0	0

Total	119	6	119	1	0	0

(b) Breakdown of compensation for persons belonging to the same network as auditing CPAs, etc.

	Fiscal year ended March 31, 2019	Fiscal year ended March 31, 2020

Classification	Audit compensation	Non-audit compensation	Audit compensation	Non-audit compensation

	(Millions of yen)	(Millions of yen)	(Millions	(Millions	(Millions	(Millions
			of yen)	of dollars)	of yen)	of dollars)
Reporting company	―	0	―	―	2	0

Consolidated subsidiaries	228	50	218	2	72	0

Total	228	51	218	2	75	0

Description ofnon-audit services by auditing CPAs, etc. to the reporting company (Fiscal year ended March 31, 2019)
Non-audit services for which the Company pays the auditing CPAs, etc. consist of such services as the preparation of comfort letters for the sale of common shares of the Company.

(Fiscal year ended March 31, 2020) Not applicable.

Description ofnon-audit services by auditing CPAs, etc. to consolidated subsidiaries (Fiscal year ended March 31, 2019)
Non-audit services for which consolidated subsidiaries pay the auditing CPAs, etc. consist of services involving support for building internal controls.

(Fiscal year ended March 31, 2020)

Non-audit services for which consolidated subsidiaries pay the auditing CPAs, etc. consist of services involving support for building internal controls.

Description ofnon-audit services by a firm in the same network as auditing CPAs, etc. to the reporting company (Fiscal year ended March 31, 2019)
Non-audit services for which the Company pays a firm in the same network as the auditing CPAs, etc. consist of such services as tax-related advisory services.

(Fiscal year ended March 31, 2020)

Non-audit services for which the Company pays a firm in the same network as the auditing CPAs, etc. consist of such services as tax-related advisory services.

Description ofnon-audit services by a firm in the same network as auditing CPAs, etc. to consolidated subsidiaries
(Fiscal year ended March 31, 2019)
- 37 -

Non-audit services for which consolidated subsidiaries pay a firm in the same network as the auditing CPAs, etc. consist of such services as tax-related advisory services.

(Fiscal year ended March 31, 2020)

Non-audit services for which consolidated subsidiaries pay a firm in the same network as the auditing CPAs, etc. consist of such services as tax-related advisory services.

Description of other significant compensation (Fiscal year ended March 31, 2019)
Not applicable.

(Fiscal year ended March 31, 2020) Not applicable.

(h) Policy for determination of compensation for audits

The Company determines the amount of compensation for audits to the audit firm in consideration of the retention of independence of the audit firm, the characteristics of services and the number of days taken to conduct audits.

Reason why Audit and Supervisory Committee agreed on amount of compensation, etc. for auditing CPAs, etc. The Audit and Supervisory Committee determined that the Accounting Auditor's compensation, etc. for this fiscal year is appropriate and agreed on it as a result of a review conducted in consultation with the Company's relevantdepartments-i.e., the General Accounting & Control Department and the Internal Auditing Department-regarding the contents of the audit plan, the basis of calculating the compensation estimate and a comparison with previous audit details, and the Accounting Auditor's compensation with necessary materials reported and submitted by the Accounting Auditor.

Compensation for officers, etc.

Total amount of compensation, etc. by officer classification, total amount of compensation by type, and number of eligible officers at the reporting company

		Total amount of compensation, etc. by type
	Total amount of		(Millions of yen)	Number of eligible
Officer classification	compensation, etc.	Fixed	Performance-	Other	officers (persons)
	(Millions of yen)	based
	compensation	compensation
			compensation
Directors who are not Audit and
Supervisory Committee Members	696	186	510	-	5
(excluding Outside Directors)
Directors who are Audit and
Supervisory Committee Members	32	32	-	-	1
(excluding Outside Directors)
Outside Officers	28	28	-	-	3


	Total amount of	Total amount of compensation, etc. by type
	(Millions of dollars)
Officer classification	compensation, etc.	Number of eligible
	Performance-
(Millions of	Fixed	Other	officers (persons)
	based
	dollars)	compensation	compensation
	compensation
Directors who are not Audit and
Supervisory Committee Members	6	1	4	-	5
(excluding Outside Directors)
Directors who are Audit and
Supervisory 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 ¥114 million (USD 1 million), are not included in the above amounts.

- 38 -

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

	Total amount of			Amount of compensation on a consolidated
			basis, etc. by type (Millions of yen)
Name	compensation on a	Officer classification	Company
consolidated basis, etc.	classification	Fixed	Performance-	Other
	(Millions of yen)			compensation	based	compensation
			compensation
Shuntaro		Director who is not an	Reporting	78	180	-
258	Audit and Supervisory
Furukawa	company
	Committee Member

Shigeru		Director who is not an	Reporting	72	120	-
192	Audit and Supervisory
Miyamoto	company
	Committee Member

Shinya		Director who is not an	Reporting	12	120	-
132	Audit and Supervisory
Takahashi	company
	Committee Member


	Total amount of			Amount of compensation on a consolidated
		Company	basis, etc. by type (Millions of dollars)
Name	compensation on a	Officer classification
consolidated basis, etc.	classification	Fixed	Performance-	Other
	(Millions of dollars)			compensation	based	compensation
			compensation
Shuntaro		Director who is not an	Reporting	0	1	-
2	Audit and Supervisory
Furukawa	company
	Committee Member

Shigeru		Director who is not an	Reporting	0	1	-
1	Audit and Supervisory
Miyamoto	company
	Committee Member

Shinya		Director who is not an	Reporting	0	1	-
1	Audit and Supervisory
Takahashi	company
	Committee Member

- 39 -

(iii) 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 and Supervisory 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: a fixed compensation (salary paid in the same amount periodically); and performance-based compensation designed to raise incentives for higher performance (salary linked to profit). The fixed compensation is determined by the Board of Directors in accordance with the position and responsibility of each Director. Performance-based compensation is calculated using a formula that uses consolidated operating profit as a benchmark and is determined by the Board of Directors based on points corresponding to each Director's position. No index target has been set for performance- based compensation as described in "II. Business Overview, 1. Management policy, management environment, issues to address, (2) Targeted management index."

Compensation for Directors who are Audit and Supervisory Committee Members consists only of fixed compensation in view of the fact that they are in an independent position that is not affected by other Directors who execute operations.

(Note) Performance-based compensation for each Director who is not an Audit and Supervisory Committee Member is calculated using the following formula:

Calculation method of performance-based compensation for Directors who are not Audit and Supervisory Committee Members ("Directors")

Performance-based 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	Points	Number of Directors (persons)	Total points
Representative Director and President	6.0	1	6.0
Representative Director and Fellow	4.5	1	4.5

Director and Senior Managing Executive Officer	4.5	1	4.5

Director and Managing Executive Officer	3.0	0	0.0
Director and Senior Executive Officer	2.0	2	4.0

Sum total	-	5	19.0

(Note) The above is calculated based on the number of Directors as of June 29, 2020.

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 in which 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 ¥800 million (USD 7.0 million). In cases where the amount calculated by multiplying consolidated operating profit by 0.2% exceeds ¥800 million (USD 7.0 million), the amount shall be ¥800 million (USD 7.0 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 commencement of 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 of months in cases where a Director resigns after the end of the period.
A resolution was adopted at the 76th Annual General Meeting of Shareholders on June 29, 2016 to establish an upper limit on compensation to Directors who are not Audit and Supervisory Committee Members of ¥500 million (USD 4.0 million) per year as a fixed compensation limit and up to 0.2% of consolidated operating profit of the relevant business year as aperformance-based compensation limit.
- 40 -

At the 76th Annual General Meeting of Shareholders on June 29, 2016, a resolution was adopted to establish an upper limit on compensation to Directors who are Audit and Supervisory Committee Members of ¥100 million (USD 0.0 million) per year.
Within the aforementioned upper limit on compensation, the amount of compensation to Directors who are not Audit and Supervisory Committee Members is determined at the Board of Directors' meeting held after the Annual General Meeting of Shareholders and the amount of compensation to Directors who are Audit and Supervisory Committee Members is determined subject to discussion among Audit and Supervisory Committee Members at the meeting of the Audit and Supervisory Committee held after said Board of Directors' meeting for their respective terms of office (limited to cases in which there is reelection associated with expiry of term of office).
The Company has established a system in which matters related to compensation to Directors are deliberated at anon-mandatory Nomination Advisory Committee, mainly consisting of Outside Directors, and reported to the Board of Directors.

- 41 -

Shareholding status

Criteria for and approach to classification of investment shares

In principle, it is the Company's policy not to hold any investment shares for pure investment purposes; the Company exclusively holds investment shares for purposes other than pure investment in accordance with its shareholding policy.

Investment shares held for purposes other than pure investment
1. Shareholding policy, method of verifying the rationality of shareholding and verification at Board of Directors' meetings, etc. as to whether or not to hold individual issues
  The Company holds investment shares for the purpose of maintaining and developing business alliances and business relationships if it is deemed to contribute to improving corporate value over the medium- to long-term. At its meetings, the Board of Directors confirms the purpose and rationality of holding individual investment shares (limited to listed stocks) and then verifies the propriety of holding such shares on an annual basis in light of the Company's shareholding policy. The Company will consider selling investment shares with diminished significance issue by issue as a result of such verification to reduce such holdings.
2. Number of issues and book value

			Number of issues		Total amount stated on balance sheet
				(issues)		(Millions of yen)	(Millions of dollars)
Unlisted stocks			16		6,203	57

Stocks other than unlisted stocks		14		43,483	402

Issues with increased number of shares in the fiscal year ended March 31, 2020

		Number of	Total amount of acquisition associated		Reason for increase in
		issues	with increase in number of shares
			number of shares
		(issues)
		(Millions of yen)	(Millions of dollars)

								To facilitate business
	Unlisted stocks	1		119	1		collaboration and maintain
			and develop business

								relationship.
	Stocks other than	-		-	-
	unlisted stocks

Issues with decreased number of shares in the fiscal year ended March 31, 2020

		Number of	Total amount of sale associated with
		issues	decrease in number of shares
		(issues)	(Millions of yen)	(Millions of dollars)
	Unlisted stocks	-		-	-

	Stocks other than	7		1,618	14
	unlisted stocks

Information on number of specific investment shares and deemed shareholdings by issue, book value, etc. Specific investment shares

	Fiscal year ended	Fiscal year ended
	March 31, 2020	March 31, 2019		Holder of
	Number of shares	Number of shares	Shareholding purpose, quantitative
	(Shares)	(Shares)	the
Issue	shareholding effect and reason for increase in
			Company's
	Book	Book		number of shares
	value	value	Book value	shares

	(Millions	(Millions	(Millions of yen)
	of yen)	of dollars)
BANDAI NAMCO		3,845,700	3,845,700	Shares are held for the purpose of maintaining
			No
Holdings Inc.	20,155	186	19,959	and developing the business relationship.

- 42 -

		15,081,000	15,081,000	Shares are held for the purpose of facilitating
DeNA Co., Ltd.	17,825		165	25,140	business collaboration and maintaining and	Yes
		developing the business relationship.


The Bank of Kyoto,			753,459	908,459	Shares are held for the purpose of facilitating	Yes
Ltd.					financial transactions.
2,591		23	4,206

KADOKAWA			612,200	612,200	Shares are held for the purpose of maintaining
DWANGO					No
834		7	714	and developing the business relationship.
CORPORATION

Mitsubishi UFJ			1,865,870	2,455,870	Shares are held for the purpose of facilitating
Financial Group,					No*1
751		6	1,350	financial transactions.
Inc.

SQUARE ENIX			91,252	91,252	Shares are held for the purpose of maintaining
HOLDINGS CO.,					No
440		4	354	and developing the business relationship.
LTD.

TOPPAN			182,885	182,885	Shares are held for the purpose of maintaining
PRINTING CO.,	302		2	305	and developing the business relationship.	No
LTD.

KONAMI			63,734	63,734	Shares are held for the purpose of maintaining
HOLDINGS					No
211		1	306	and developing the business relationship.
CORPORATION

Resona Holdings,			323,769	647,469	Shares are held for the purpose of facilitating	No*2
Inc.					financial transactions.
105		0	310

Nissha Co., Ltd.			104,104	104,104	Shares are held for the purpose of maintaining	Yes
				and developing the business relationship.
74		0	121

SANSHIN			50,180	50,180	Shares are held for the purpose of maintaining
ELECTRONICS					Yes
70		0	95	and developing the business relationship.
CO., LTD.

KOEI TECMO			18,952	18,952	Shares are held for the purpose of maintaining
HOLDINGS CO.,					No*3
52		0	40	and developing the business relationship.
LTD.

JAPAN PULP AND			11,355	11,355	Shares are held for the purpose of maintaining
PAPER COMPANY					No
42		0	47	and developing the business relationship.
LIMITED

TV TOKYO			10,000	10,000	Shares are held for the purpose of maintaining
Holdings					No
24		0	23	and developing the business relationship.
Corporation

Sumitomo Mitsui			-	60,920	Shares were held for the purpose of facilitating	No
Trust Holdings, Inc.					financial transactions.
-		-	242

Shirai Electronics			-	336,000	Shares were held for the purpose of maintaining	Yes
Industrial Co., Ltd.					a stable relationship.
-		-	126

Mizuho Financial			-	284,219	Shares were held for the purpose of facilitating	No
Group, Inc.	-		-	48	financial transactions.


Sumitomo Mitsui			-	8,849	Shares were held for the purpose of facilitating
Financial Group,	-		-	34	financial transactions.	No
Inc.

(Notes) 1. "-" indicates that the issue is not held.

At its meetings, the Board of Directors confirms the purpose and rationality of holding the specific investment shares listed above and then verifies the propriety of holding such shares on an annual basis in light of the Company's shareholding policy; however, it is difficult to describe the quantitative effect of holding such shares.
*1: Mitsubishi UFJ Financial Group, Inc. is an indirect holder of the Company's shares through its subsidiary MUFG Bank, Ltd., etc.
*2: Resona Holdings, Inc. is an indirect holder of the Company's shares through its subsidiary Resona Bank, Limited.
*3: KOEI TECMO HOLDINGS CO., LTD. is an indirect holder of the Company's shares through its subsidiary
KOEI TECMO GAMES CO., LTD.

- 43 -

V. Financial Information

Consolidated financial statements, etc.

(1)	Consolidated financial statements
	(i)	Consolidated balance sheets
				Previous fiscal year			Current fiscal year
				(As of March 31, 2019)		(As of March 31, 2020)

												(Millions of
				(Millions of yen)	(Millions of yen)		dollars)
	Assets
	Current assets
		Cash and deposits				844,550				890,402		8,244
		Notes and accounts receivable - trade			78,169			133,051	1,231
		Securities				238,410				326,382		3,022
		Inventories	*1	135,470		*1	88,994	824
		Other				48,453				63,268		585
		Allowance for doubtful accounts			(82)			(515)	(4)
		Total current assets				1,344,972				1,501,583		13,903
	Non-current assets
		Property, plant and equipment
		Buildings and structures, net				37,592				38,149		353

		Tools, furniture and fixtures, net				4,015				4,681		43
		Machinery, equipment and vehicles, net				1,575				1,678		15

		Land				38,223				37,685		348
		Construction in progress				143				672		6

		Total property, plant and equipment		*2		81,550		*2		82,866		767

		Intangible assets

		Software				11,962				12,832		118
		Other				2,128				2,185		20

		Total intangible assets				14,090				15,017		139
		Investments and other assets

		Investment securities		*3		167,134		*3		237,710		2,201

		Retirement benefit asset				7,056				6,407		59

		Deferred tax assets				57,992				72,199		668
		Other				17,536				18,329		169
		Allowance for doubtful accounts				(29)				(27)		(0)
		Total investments and other assets				249,690				334,619		3,098

		Total non-current assets				345,331				432,504		4,004
	Total assets				1,690,304				1,934,087		17,908

- 44 -

		Previous fiscal year		Current fiscal year
		(As of March 31, 2019)	(As of March 31, 2020)

							(Millions of
		(Millions of yen)	(Millions of yen)		dollars)
Liabilities
Current liabilities
Notes and accounts payable - trade			59,689			98,074	908
Provision for bonuses	3,891		4,394	40
Income taxes payable			62,646			66,411	614
Other	118,781		186,801	1,729
Total current liabilities			245,009			355,683	3,293
Non-current liabilities
Retirement benefit liability			15,068			20,450	189
Other	15,427		17,052	157
Total non-current liabilities			30,496			37,503	347
Total liabilities		275,505		393,186	3,640
Net assets
Shareholders' equity
Share capital			10,065			10,065	93
Capital surplus	12,069		15,041	139
Retained earnings			1,556,881			1,707,119	15,806
Treasury shares	(156,755)		(156,798)	(1,451)
Total shareholders' equity			1,422,260			1,575,428	14,587
Accumulated other comprehensive income
Valuation difference on available-for-sale securities			17,665			10,637	98
Foreign currency translation adjustment	(30,214)		(45,378)	(420)
Total accumulated other comprehensive income			(12,548)			(34,741)	(321)
Non-controlling interests		5,086		213	1
Total net assets			1,414,798			1,540,900	14,267
Total liabilities and net assets		1,690,304		1,934,087	17,908

- 45 -

Consolidated statements of income and consolidated statements of comprehensive income Consolidated statements of income

Previous fiscal year (From April 1, 2018 to March 31, 2019)

Current fiscal year (From April 1, 2019 to March 31, 2020)

									(Millions of
		(Millions of yen)	(Millions of yen)		dollars)
Net sales				1,200,560				1,308,519	12,115
Cost of sales	1, 3	699,370		1, 3	666,817	6,174
Gross profit				501,189				641,701	5,941
Selling, general and administrative expenses		2, 3	251,488		2, 3	289,331	2,678
Operating profit				249,701				352,370	3,262
Non-operating income
Interest income				13,131				15,203	140
Share of profit of entities accounted for using equity
method			6,949			7,945	73
Foreign exchange gains				5,426				-	-
Other			2,807			2,432	22
Total non-operating income				28,315				25,582	236
Non-operating expenses
Foreign exchange losses				-				15,806	146
Other			662			1,683	15
Total non-operating expenses				662				17,490	161
Ordinary profit			277,355			360,461	3,337
Extraordinary income
Gain on sales of non-current assets	*4	1		*4	10	0
Gain on sales of investment securities				0				1,030	9
Total extraordinary income			1			1,041	9
Extraordinary losses
Impairment loss	*5	4,622		*5	-	-
Loss on disposal of non-current assets		*6		278		*6		173	1

Loss on sales of investment securities			-			56	0
Loss on valuation of investment securities				682				-	-
Total extraordinary losses			5,584			229	2
Profit before income taxes				271,772				361,273	3,345
Income taxes - current			88,137			114,063	1,056
Income taxes - deferred				(10,932)				(11,473)	(106)
Total income taxes			77,204			102,589	949
Profit				194,568				258,683	2,395
Profit attributable to non-controlling interests			558			41	0
Profit attributable to owners of parent				194,009				258,641	2,394

- 46 -

Consolidated statements of comprehensive income

Previous fiscal year (From April 1, 2018 to March 31, 2019)

Current fiscal year (From April 1, 2019 to March 31, 2020)

						(Millions of
	(Millions of yen)	(Millions of yen)		dollars)
Profit			194,568		258,683	2,395
Other comprehensive income
Valuation difference on available-for-sale securities			1,313		(7,178)	(66)
Foreign currency translation adjustment		4,920		(14,266)	(132)
Share of other comprehensive income of entities
accounted for using equity method			(460)		(747)	(6)
Total other comprehensive income	*1	5,773	*1	(22,192)	(205)
Comprehensive income			200,341		236,490	2,189
Comprehensive income attributable to
Comprehensive income attributable to owners of parent			199,795		236,449	2,189
Comprehensive income attributable to non-controlling
interests		546		41	0

- 47 -

(iii) Consolidated statements of changes in equity Previous fiscal year (from April 1, 2018 to March 31, 2019)

						(Millions of yen)
			Shareholders' equity

						Total
	Share capital	Capital surplus	Retained earnings		Treasury shares	shareholders'
						equity
Balance as of April 1, 2018	10,065	13,742	1,564,240		(250,679)	1,337,369

Changes in items during
period
Dividends of surplus			(78,081)			(78,081)

Profit attributable to			194,009			194,009
owners of parent

Purchase of treasury					(31,038)	(31,038)
shares

Disposal of treasury shares		1			0	1

Cancellation of treasury		(1,674)	(123,287)		124,961	-
shares

Net changes in items other
than shareholders' equity
Total changes in items	-	(1,673)	(7,358)		93,923	84,891
during period

Balance as of March 31,	10,065	12,069	1,556,881		(156,755)	1,422,260
2019


	Accumulated other comprehensive income

	Valuation		Total	Non-controlling
	Foreign currency	accumulated		Total net assets
	difference on		interests
	translation	other
	available-for-sale
	adjustment	comprehensive
	securities
		income

Balance as of April 1, 2018	16,402	(34,736)	(18,334)		4,540	1,323,574

Changes in items during
period
Dividends of surplus						(78,081)

Profit attributable to						194,009
owners of parent

Purchase of treasury						(31,038)
shares

Disposal of treasury shares						1

Cancellation of treasury						-
shares

Net changes in items other	1,263	4,522	5,785		546	6,331
than shareholders' equity

Total changes in items	1,263	4,522	5,785		546	91,223
during period

Balance as of March 31,	17,665	(30,214)	(12,548)		5,086	1,414,798
2019

- 48 -

Current fiscal year (from April 1, 2019 to March 31, 2020)

(Millions of yen)

			Shareholders' equity

	Share capital	Capital surplus	Retained earnings		Treasury shares	Total shareholders'
		equity

Balance as of April 1,	10,065	12,069	1,556,881		(156,755)	1,422,260
2019

Changes in items during
period
Dividends of surplus			(108,403)			(108,403)

Profit attributable to			258,641			258,641
owners of parent

Purchase of treasury					(43)	(43)
shares

Purchase of shares of
consolidated		2,972				2,972
subsidiaries
Net changes in items
other than shareholders'
equity
Total changes in items	-	2,972	150,238		(43)	153,167
during period

Balance as of March 31,	10,065	15,041	1,707,119		(156,798)	1,575,428
2020


	Accumulated other comprehensive income

	Valuation		Total	Non-controlling
	Foreign currency	accumulated		Total net assets
	difference on		interests
	translation	other
	available-for-sale
	adjustment	comprehensive
	securities
		income

Balance as of April 1,	17,665	(30,214)	(12,548)		5,086	1,414,798
2019

Changes in items during
period
Dividends of surplus						(108,403)

Profit attributable to						258,641
owners of parent

Purchase of treasury						(43)
shares

Purchase of shares of
consolidated						2,972
subsidiaries
Net changes in items
other than shareholders'	(7,028)	(15,163)	(22,192)		(4,872)	(27,065)
equity
Total changes in items	(7,028)	(15,163)	(22,192)		(4,872)	126,102
during period

Balance as of March 31,	10,637	(45,378)	(34,741)		213	1,540,900
2020

- 49 -

Current fiscal year (from April 1, 2019 to March 31, 2020)

(Millions of dollars)

			Shareholders' equity

	Share capital	Capital surplus	Retained earnings		Treasury shares	Total shareholders'
		equity

Balance at beginning of	93	111	14,415		(1,451)	13,169
period

Changes during period

Dividends of surplus			(1,003)			(1,003)

Profit attributable to			2,394			2,394
owners of parent

Purchase of treasury					(0)	(0)
shares

Purchase of shares of
consolidated		27				27
subsidiaries
Net changes in items
other than shareholders'
equity
Total changes in items	-	27	1,391		(0)	1,418
during period

Balance at end of period	93	139	15,806		(1,451)	14,587


	Accumulated other comprehensive income

	Valuation		Total	Non-controlling
	Foreign currency	accumulated		Total net assets
	difference on		interests
	translation	other
	available-for-sale
	adjustment	comprehensive
	securities
		income

Balance at beginning of	163	(279)	(116)		47	13,099
current period

Changes during period

Dividends of surplus						(1,003)

Profit attributable to						2,394
owners of parent

Purchase of treasury						(0)
shares

Purchase of shares of
consolidated						27
subsidiaries
Net changes in items
other than shareholders'	(65)	(140)	(205)		(45)	(250)
equity
Total changes in items	(65)	(140)	(205)		(45)	1,167
during period

Balance at end of current	98	(420)	(321)		1	14,267
period

- 50 -

(iv) Consolidated statements of cash flows

Previous fiscal year (From April 1, 2018 to March 31, 2019)

Current fiscal year (From April 1, 2019 to March 31, 2020)

										(Millions of
	(Millions of yen)		(Millions of yen)		dollars)
Cash flows from operating activities

Profit before income taxes		271,772				361,273	3,345
Depreciation				9,564				9,557		88
Impairment loss				4,622				-	-
Increase (decrease) in allowance for doubtful accounts				44				487		4
Interest and dividend income		(14,355)				(16,689)	(154)
Foreign exchange losses (gains)				(3,966)				16,226		150
Share of loss (profit) of entities accounted for using
equity method				(6,949)				(7,945)	(73)
Decrease (increase) in trade receivables				(8,416)				(55,372)		(512)
Decrease (increase) in inventories				8,484				43,230	400
Increase (decrease) in trade payables			(51,349)				20,832		192
Increase (decrease) in retirement benefit liability				(1,970)				5,551	51
Loss (gain) on valuation of investment securities				682				-	-
Loss (gain) on sales of short-term and long-term				(53)				(945)	(8)
investment securities
Increase (decrease) in accrued consumption taxes				1,343				4,116		38
Other, net				17,569				61,513	569
Subtotal			227,022				441,835		4,091
Interest and dividends received				12,552				17,503	162
Interest paid				(44)				(121)		(1)
Income taxes paid		(69,000)				(111,464)	(1,032)
Net cash provided by (used in) operating activities			170,529				347,753		3,219
Cash flows from investing activities
Purchase of short-term and long-term investment			(483,195)				(617,546)		(5,718)
securities
Proceeds from sales and redemption of short-term and
long-term investment securities		575,643				418,723	3,877
Purchase of property, plant and equipment and intangible
assets			(10,736)				(9,843)		(91)
Proceeds from sales of property, plant and equipment and
intangible assets				(1)				833	7
Payments into time deposits			(382,891)				(364,493)		(3,374)
Proceeds from withdrawal of time deposits		346,993				387,741	3,590
Other, net				(457)				(3,847)		(35)
Net cash provided by (used in) investing activities				45,353				(188,433)	(1,744)
Cash flows from financing activities
Purchase of treasury shares				31,038)				(43)	(0)
			ሺ77,980)
Dividends paid						(108,331)	(1,003)
Other, net			ሺ	(18)				(2,656)	(24)
Net cash provided by (used in) financing activities			(109,037)				(111,031)		(1,028)
Effect of exchange rate change on cash and cash equivalents				(5,948)				(12,264)	(113)
Net increase (decrease) in cash and cash equivalents			100,897				36,024		333
Cash and cash equivalents at beginning of period		484,480				585,378	5,420
Cash and cash equivalents at end of period	*1		585,378		*1		621,402		5,753

- 51 -

Notes to Consolidated Financial Statements

Significant matters forming the basis of preparing the consolidated financial statements 1. Scope of consolidation

Number of consolidated subsidiaries: 26 companies
The names of significant consolidated subsidiaries are omitted because they are provided in "I. Overview of the Company, 3. Subsidiaries and associates."
Two new subsidiaries established by the Company's consolidated subsidiaries were included in the scope of consolidation from the consolidated fiscal year ended March 31, 2020.
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

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
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 is because the impact each of said companies has on profit or loss, retained earnings, etc., is negligible, and it is immaterial as a whole.
With respect to associates accounted for under the equity method whose account closing dates differ from the consolidated account closing date, the financial statements of each of the companies, either based on their fiscal year or based on provisional accounts closing, are incorporated.

3. Year-ends of consolidated subsidiaries

Of consolidated subsidiaries, iQue (China) Ltd., Nintendo RU LLC. and two other subsidiaries 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 the consolidated financial statements to reflect any significant transactions that took place between their account closing dates and the consolidated account closing date.

4. Accounting procedures

Valuation basis and method for important assets

Securities
For held-to-maturity debt securities, the amortized cost method (straight-line method) is used. For other securities with market quotations, the market price method based on the market price, etc., on the account closing date is used (valuation difference is reported as a component of net assets and the cost of sales is calculated using the moving average method), and securities without market quotations are stated at cost using the moving-average method.
Derivatives
The fair value method is applied.
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).
- 52 -

Depreciation and amortization methods of significant depreciable and amortizable assets

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 their commercial obsolescence. However, the straight-line method is applied for buildings, except for accompanying facilities, acquired on April 1, 1998 or thereafter and for facilities attached to buildings and structures acquired on April 1, 2016, and thereafter. Overseas consolidated subsidiaries apply the straight- line method based on the estimated economic useful lives.

Useful lives of main assets are as follows:
Buildings and structures	3-60 years

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

Accounting for significant reserves

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

Accounting method for retirement benefit

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, 2020, on a benefit formula basis.
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.
Application of simple method at small enterprises, etc.
Some consolidated subsidiaries apply a simple method including a method in which an estimated amount required 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 retirement benefit liability and retirement benefit expenses.
Assets in the Company's defined benefit corporate pension plan are recorded as "Retirement benefit asset" under investments and other assets as the plan assets exceeded the retirement benefit obligations.

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 the foreign exchange market on the respective account closing dates. The foreign exchange gains and losses from translation are recognized in the accompanying consolidated statements of income. Assets or liabilities of overseas consolidated subsidiaries, etc. are translated into yen based on the spot rate of exchange in the foreign 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 are included in "Foreign currency translation adjustment" under net assets.
- 53 -

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

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 31, 2020)
Implementation Guidance on Accounting Standard for Revenue Recognition (ASBJ Guidance No. 30, March 31, 2020)

(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 performance obligations 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.

Accounting Standard for Accounting Policy Disclosures, Accounting Changes and Error Corrections (ASBJ Statement No.24, March 31, 2020)

(1) Description

The purpose of this accounting standard is to present an overview of the accounting principles and procedures adopted in cases where the provisions of relevant accounting standards, etc. are not clear.

(2) Scheduled application date

This accounting standard is scheduled to be applied from the end of the fiscal year ending March 31, 2021.

Accounting Standard for Disclosure of Accounting Estimates (ASBJ Statement No. 31, March 31, 2020)

(1) Description

The purpose of this accounting standard is to disclose information that will facilitate the understanding of the users of financial statements regarding accounting estimates serving as the basis of amounts recorded in the financial statements for the current fiscal year that have the risk of significantly impacting the financial statements for the following fiscal year.

(2) Scheduled application date

This accounting standard is scheduled to be applied from the end of the fiscal year ending March 31, 2021.

- 54 -

Notes to consolidated balance sheets

*1. Inventories as of March 31, 2019 and 2020 were as follows:

	Previous fiscal year		Current fiscal year
	(As of March 31, 2019)		(As of March 31, 2020)
Finished goods	¥	99,918 million	¥	71,815 million	USD 664 million
Work in process		795		19	0
Raw materials and supplies	¥	34,756 million	¥	17,158 million	USD 158 million

*2. Accumulated depreciation of property, plant and equipment as of March 31, 2019 and 2020 were as follows:

	Previous fiscal year	Current fiscal year
	(As of March 31, 2019)	(As of March 31, 2020)
Accumulated depreciation	¥ 71,525 million	¥ 73,999 million	USD 685 million

*3. Investments in unconsolidated subsidiaries and associates as of March 31, 2019 and 2020 were as follows:

	Previous fiscal year	Current fiscal year
	(As of March 31, 2019)	(As of March 31, 2020)
Investment securities	¥ 40,761 million	¥ 47,925 million	USD 443 million

- 55 -

Notes to consolidated statements of income

*1. The ending inventory balance is the amount after write-down of book value due to decline in profitability, and the loss on valuation of inventories included in cost of sales for the years ended March 31, 2019 and

2020 were as follows:

Previous fiscal year (From April 1, 2018 to March 31, 2019)

Current fiscal year (From April 1, 2019 to March 31, 2020)

Loss on valuation of inventories

¥ 10,414 million

¥ 3,927 million

USD 36 million

*2. The major items of selling, general and administrative expenses for the years ended March 31, 2019 and

2020 were as follows:

	Previous fiscal year		Current fiscal year
	(From April 1, 2018		(From April 1, 2019
	to March 31, 2019)		to March 31, 2020)
Research and development expenses	¥	69,624 million	¥	84,127 million	USD 778 million
Advertising expenses		75,421		76,003	703
Salaries, allowances and bonuses		26,974		28,589	264
Retirement benefit expenses		4,397		9,293	86
Depreciation		6,418		7,130	66
Provision for bonuses		1,879		2,086	19
Provision of allowance for doubtful accounts	¥	202 million	¥	311 million	USD 2 million

*3. Research and development expenses included in general and administrative expenses and manufacturing costs for the years ended March 31, 2019 and 2020 were as follows:

Previous fiscal year (From April 1, 2018 to March 31, 2019)

Current fiscal year (From April 1, 2019 to March 31, 2020)

Research and development expenses

¥ 69,628million

¥ 84,159million

USD 779 million

*4. Gain on sales of non-current assets for the years ended March 31, 2019 and 2020 were as follows:

Previous fiscal year (From April 1, 2018 to March 31, 2019)

Current fiscal year (From April 1, 2019 to March 31, 2020)

Machinery, equipment and	¥	1 million	Land	¥	8 million	USD 0 million
vehicles

Tools, furniture and		0 million	Machinery, equipment		2 million	0
fixtures		and vehicles

Total	¥	1 million		¥	10 million	USD 0 million

*5. Impairment loss for the years ended March 31, 2019 and 2020 were as follows:

Previous fiscal year (From April 1, 2018 to March 31, 2019)

In the fiscal year ended March 31, 2019, Nintendo recorded an impairment loss for the following asset group.

Location	Purpose	Type	Write-off amount

Japan	Business-use assets	Land and buildings, etc.	¥4,622 million	USD 42 million

At Nintendo, assets are grouped by administrative accounting categories used for managing income and expenditure on an ongoing basis. Recording of impairment loss of assets is determined individually mainly for idle assets with no potential of future use and assets determined to be disposed of. The book value of the assets above was reduced to the recoverable amount, and the difference was recorded as an impairment loss in the section of extraordinary losses.

The breakdown of impairment losses was for land, buildings and others of ¥3,823 million (USD 35 million), ¥769 million (USD 7 million) and ¥30 million (USD 0 million), respectively.

The recoverable amount of assets for disposal is mainly measured by net selling value based on valuation according to real estate appraisal standards.

- 56 -

Current fiscal year (From April 1, 2019 to March 31, 2020)

Not applicable.

*6. Loss on disposal of non-current assets for the years ended March 31, 2019 and 2020 were as follows:

Previous fiscal year (From April 1, 2018 to March 31, 2019)

Current fiscal year (From April 1, 2019 to March 31, 2020)

Buildings and structures	¥277 million	Buildings and structures	¥ 162 million	USD 1 million
Machinery, equipment and	0	Software	6	0
vehicles

Tools, furniture and fixtures	0	Tools, furniture and fixtures	4	0
Total	¥278 million	Total	¥ 173 million	USD 1 million

Notes to consolidated statements of comprehensive income

*1. Reclassification adjustments and tax effects related to other comprehensive income

		Previous fiscal year		Current fiscal year
		(From April 1, 2018		(From April 1, 2019
		to March 31, 2019)		to March 31, 2020)
Valuation difference on available-for-sale securities:
Amount arising during the fiscal year	¥	828 million	¥	(9,838) million	USD (91)	million
Reclassification adjustments		1,227		(330)	(3)
Amount before tax effects		2,056		(10,169)	(94)
Tax effects		(742)		2,990	27
Valuation difference on available-for-sale		1,313		(7,178)	(66)
securities

Foreign currency translation adjustment:
Amount arising during the fiscal year		4,935		(14,266)	(132)
Reclassification adjustments		(15)		-	-
Amount before tax effects		4,920		(14,266)	(132)
Tax effects		-		-	-
Foreign currency translation adjustment		4,920		(14,266) million	(132)
Share of other comprehensive income of entities
accounted for using equity method:
Amount arising during the fiscal year		(460)		(747) million	(6)
Total other comprehensive income		¥	5,773million	¥	(22,192) million	USD (205)	million

- 57 -

Notes to consolidated statements of changes in equity

Previous fiscal year (From April 1, 2018 to March 31, 2019)

1. Matters concerning outstanding shares

				(Shares)
Type of share	As of April 1,	Increase	Decrease	As of March 31,
2018	2019

Common shares	141,669,000	-	10,000,000	131,669,000

(Summary of causes of changes)

Decrease in treasury shares was due to the cancellation of treasury shares based on the resolution at the Board of Directors' meeting held on February 22, 2019.

2. Matters concerning treasury shares

				(Shares)
Type of share	As of April 1,	Increase	Decrease	As of March 31,
2018	2019

Common shares	21,543,231	1,001,083	10,000,050	12,544,264

(Summary of causes of changes)

Increase in treasury shares consisted of: an increase of 1,083 shares from acquisitions in line with buyback requests for shares less than one unit; and an increase of 1,000,000 shares from acquisitions by purchases on the market of the Tokyo Stock Exchange based on the resolution at the Board of Directors' meeting held on February 22, 2019.

Decrease in treasury shares consisted of: a decrease of 50 shares from sales in line with selling requests for shares less than one unit; and a decrease of 10,000,000 shares from the cancellation of treasury shares based on the resolution at the Board of Directors' meeting held on February 22, 2019.

3. Matters concerning dividends

Amount of dividends paid

Resolution	Type of	Amount of dividends	Dividends per	Record date	Effective date
share	share

Annual General Meeting	Common	¥57,660 million	¥480	March 31, 2018	June 29, 2018
of Shareholders held on
shares
June 28, 2018

Meeting of Board of	Common			September 30,	December 3,
Directors held on	¥20,421 million	¥170
shares	2018	2018
October 30, 2018

Dividend payments for which the record date is in the fiscal year ended March 31, 2019, and the effective date is in the following fiscal year

Resolution	Type of	Amount of	Source of	Dividends per	Record date	Effective date
share	dividends	dividends	share

Annual General Meeting	Common		Retained
of Shareholders held on	¥76,239 million	¥640	March 31, 2019	June 28, 2019
shares	earnings
June 27, 2019

Current fiscal year (From April 1, 2019 to March 31, 2020)

1. Matters concerning outstanding shares

				(Shares)
Type of share	As of April 1,	Increase	Decrease	As of March 31,
2019	2020

Common shares	131,669,000	-	-	131,669,000

2. Matters concerning treasury shares

				(Shares)
Type of share	As of April 1,	Increase	Decrease	As of March 31,
2019	2020

Common shares	12,544,264	1,090	-	12,545,354

- 58 -

(Summary of causes of changes)

Increase in treasury shares was due to acquisitions in line with buyback requests for shares less than one unit.

3. Matters concerning dividends

Amount of dividends paid

Resolution	Type of	Amount of dividends	Dividends per	Record date	Effective date
share	share

Annual General Meeting	Common
of Shareholders held on	¥76,239 million	¥640	March 31, 2019	June 28, 2019
shares
June 27, 2019

Meeting of Board of	Common	¥32,163 million	¥270	September 30, 2019	December 2, 2019
Directors held on
shares
October 31, 2019

Dividend payments for which the record date is in the fiscal year ended March 31, 2020, and the effective date is in the following fiscal year

Resolution	Type of	Amount of	Source of	Dividends per	Record date	Effective date
share	dividends	dividends	share

Annual General Meeting	Common	¥97,681 million	Retained	¥820
of Shareholders held on	March 31, 2020	June 29, 2020
shares	[USD 904 million]	earnings	[USD 7.59]
June 26, 2020

Notes to consolidated statements of cash flow

*1. "Cash and cash equivalents at end of period" were reconciled to "Cash and deposits" in the accompanying consolidated balance sheets as of March 31, 2019 and 2020 as follows:

	Previous fiscal year		Current fiscal year
	(From April 1, 2018		(From April 1, 2019
	to March 31, 2019)		to March 31, 2020)
Cash and deposits	¥	844,550 million	¥	890,402 million	USD 8,244 million
Time deposits with maturity of more than		(346,607)		(313,347)	(2,901)
three months

Short-term investments with maturity of three		87,435		44,347	410
months or less

Cash and cash equivalents	¥	585,378 million	¥	621,402 million	USD 5,753 million

Lease transactions

1. Finance lease transactions

Information of finance leases as of March 31, 2019 and 2020 were omitted as they are immaterial.

2. Operating lease transactions

Future lease payments under non-cancelable operating leases

	Previous fiscal year		Current fiscal year
	(As of March 31, 2019)		(As of March 31, 2020)
Due within one year	¥	1,355 million	¥	703 million	USD 6 million
Due after one year		3,959		2,891	26
Total	¥	5,314 million	¥	3,594 million	USD 33 million

- 59 -

Financial instruments

1. Condition of financial instruments

Policy for measures relating to financial instruments
Nintendo (the Company and its consolidated subsidiaries) invests its funds in highly safe financial assets such as 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.
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 a transaction 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 and international 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 their status 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 is immaterial.
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 and currency option contracts etc. to reduce risk of exchange rate fluctuations arising from deposits and trade receivables denominated in foreign currencies. These transactions are conducted by the Finance Department of 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 balance of foreign currency deposits during the period. 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.
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 such values, the values may vary depending on the assumptions used. In addition, the contract amounts of the derivative transactions described in "Derivative transactions" do not represent the market risk of derivative transactions.

- 60 -

2. Fair value of financial instruments

The book value on the consolidated balance sheets, fair value, and differences between them as of March 31, 2019 and 2020 were as follows:

Previous fiscal year (As of March 31, 2019)

			(Millions of yen)
	Book value	Fair value	Difference
Cash and deposits	844,550	844,550	-
Notes and accounts receivable - trade	78,169	78,169	-
Short-term and long-term investment securities
Held-to-maturity debt securities	114,044	114,044	0
Other securities	244,630	244,630	-
Total assets	1,281,394	1,281,395	0
Notes and accounts payable - trade	59,689	59,689	-
Income taxes payable	62,646	62,646	-
Total liabilities	122,336	122,336	-
Derivatives	213	213	-

Current fiscal year (As of March 31, 2020)

			(Millions of yen)
	Book value	Fair value	Difference
Cash and deposits	890,402	890,402	-
Notes and accounts receivable - trade	133,051	133,051	-
Short-term and long-term investment securities
Held-to-maturity debt securities	236,440	236,453	12
Other securities	273,523	273,523	-
Total assets	1,533,417	1,533,430	12
Notes and accounts payable - trade	98,074	98,074	-
Income taxes payable	66,411	66,411	-
Total liabilities	164,486	164,486	-
Derivatives	172	172	-
			(Millions of dollars)
	Book value	Fair value	Difference
Cash and deposits	8,244	8,244	-
Notes and accounts receivable - trade	1,231	1,231	-
Short-term and long-term investment securities
Held-to-maturity debt securities	2,189	2,189	0
Other securities	2,532	2,532	-
Total assets	14,198	14,198	0
Notes and accounts payable - trade	908	908	-
Income taxes payable	614	614	-
Total liabilities	1,523	1,523	-
Derivatives	1	1	-

(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 of holding 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.

- 61 -

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 are provided 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	Current fiscal year
	(As of March 31, 2019)	(As of March 31, 2020)
Unlisted stocks	¥46,870 million	¥54,128 million	USD 501 million

These unlisted stocks which do not have market prices and of which future cash flow cannot be estimated are not included 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 date

Previous fiscal year (As of March 31, 2019)

			(Millions of yen)
	Due within one year	Due after one year	Due after five years
	through five years	through ten years


Cash and deposits	844,550	-	-
Notes and accounts receivable - trade	78,169	-	-
Short-term and long-term investment
securities
Held-to-maturity debt securities
Certificate of deposits	81,936	-	-
Money held in trust	13,000	-	-
Corporate and government bonds	19,109	-	-
Other securities with maturity
Certificate of deposits	1,553	2,774	-
Corporate and government bonds	124,254	36,626	-
Other	1,560	14,240	4,033
Total	1,164,135	53,642	4,033

Current fiscal year (As of March 31, 2020)

			(Millions of yen)
	Due within one year	Due after one year	Due after five years
	through five years	through ten years


Cash and deposits	890,402	-	-
Notes and accounts receivable - trade	133,051	-	-
Short-term and long-term investment
securities
Held-to-maturity debt securities
Certificate of deposits	193,739	7,173	-
Money held in trust	13,000	-	-
Corporate and government bonds	22,529	-	-
Other securities with maturity
Certificate of deposits	-	6,529	-
Corporate and government bonds	127,255	49,989	-
Other	332	17,698	14,816
Total	1,380,311	81,391	14,816

- 62 -

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


Cash and deposits	8,244	-	-
Notes and accounts receivable - trade	1,231	-	-
Short-term and long-term investment
securities
Held-to-maturity debt securities
Certificate of deposits	1,793	66	-
Money held in trust	120	-	-
Corporate and government bonds	208	-	-
Other securities with maturity
Certificate of deposits	-	60	-
Corporate and government bonds	1,178	462	-
Other	3	163	137
Total	12,780	753	137

Securities

1. Held-to-maturity debt securities Previous fiscal year (As of March 31, 2019)

			(Millions of yen)
	Book value	Fair value	Difference
Securities whose fair value exceeds their book	3,107	3,108	0
value on the consolidated balance sheets

Securities whose fair value does not exceed their	110,936	110,936	(0)
book value on the consolidated balance sheets

Total	114,044	114,044	0

Current fiscal year (As of March 31, 2020)

			(Millions of yen)
	Book value	Fair value	Difference
Securities whose fair value exceeds their book	5,437	5,455	17
value on the consolidated balance sheets

Securities whose fair value does not exceed their	231,002	230,998	(4)
book value on the consolidated balance sheets

Total	236,440	236,453	12
			(Millions of dollars)
	Book value	Fair value	Difference
Securities whose fair value exceeds their book	50	50	0
value on the consolidated balance sheets

Securities whose fair value does not exceed their	2,138	2,138	(0)
book value on the consolidated balance sheets

Total	2,189	2,189	0

- 63 -

2.	Other securities
		Previous fiscal year (As of March 31, 2019)			(Millions of yen)

			Book value	Acquisition cost	Difference
	Securities whose book value on the consolidated
	balance sheets exceeds their acquisition cost
		Equity securities	54,292	28,962	25,329
		Debt securities	106,037	105,645	392
		Other	8,869	8,741	128
		Sub-total	169,199	143,349	25,850
	Securities whose book value on the consolidated
	balance sheets does not exceed their acquisition
	cost
		Equity securities	867	920	(52)
		Debt securities	74,504	75,108	(603)
		Other	58	58	-
		Sub-total	75,430	76,086	(656)
		Total	244,630	219,435	25,194
		Current fiscal year (As of March 31, 2020)			(Millions of yen)

			Book value	Acquisition cost	Difference
	Securities whose book value on the consolidated
	balance sheets exceeds their acquisition cost
		Equity securities	26,601	6,451	20,150
		Debt securities	86,280	85,930	349
		Other	2,778	2,661	117
		Sub-total	115,661	95,043	20,617
	Securities whose book value on the consolidated
	balance sheets does not exceed their acquisition
	cost
		Equity securities	18,436	22,681	(4,245)
		Debt securities	123,527	124,635	(1,107)
		Other	15,897	15,995	(97)
		Sub-total	157,862	163,312	(5,450)
		Total	273,523	258,356	15,167
					(Millions of dollars)
			Book value	Acquisition cost	Difference
	Securities whose book value on the consolidated
	balance sheets exceeds their acquisition cost
		Equity securities	246	59	186
		Debt securities	798	795	3
		Other	25	24	1
		Sub-total	1,070	880	190
	Securities whose book value on the consolidated
	balance sheets does not exceed their acquisition
	cost
		Equity securities	170	210	(39)
		Debt securities	1,143	1,154	(10)
		Other	147	148	(0)
		Sub-total	1,461	1,512	(50)
		Total	2,532	2,392	140

- 64 -

3. Other securities sold during the fiscal years ended March 31, 2019 and 2020 Previous fiscal year (From April 1, 2018 to March 31, 2019)

			(Millions of yen)
	Amount sold	Total gain	Total loss
Debt securities	279,718	62	(13)
Other	316,805	4	-
Total	596,524	67	(13)

Current fiscal year (From April 1, 2019 to March 31, 2020)

			(Millions of yen)
	Amount sold	Total gain	Total loss
Debt securities	164,106	57	(104)
Other	74,911	1,049	(56)
Total	239,018	1,107	(161)
			(Millions of dollars)
	Amount sold	Total gain	Total loss
Debt securities	1,519	0	(0)
Other	693	9	(0)
Total	2,213	10	(1)

4. Securities subject to booking of impairment loss

Previous fiscal year (from April 1, 2018 to March 31, 2019)

Impairment loss was recorded for securities in the amount of ¥682 million, i.e., stocks in the section of other securities in the amount of ¥682 million.

Current fiscal year (from April 1, 2019 to March 31, 2020)

Not applicable.

- 65 -

Derivative transactions

Derivative contracts not qualifying for hedge accounting

Currencies

Previous fiscal year (As of March 31, 2019)

(Millions of yen)

			Portion of		Unrealized
Classification	Type of transaction	Contract amount	contract amount	Fair value
gain (loss)
			over one year

	Exchange forward
	contracts
	Selling Canadian	3,236	-	21	21
	Dollar

	Selling British Pound	3,615	-	(9)	(9)
Transactions other	Currency options
Written call options
than market	Euro	40,986	-
transactions
[Premium]	[138]	[-]	12	125

	Australian Dollar	3,200	-
	[Premium]	[12]	[-]	7	5
	Purchased put options
	Euro	20,493	-
	[Premium]	[150]	[-]	221	70
	Total	-	-	-	213

Current fiscal year (As of March 31, 2020)

(Millions of yen)

			Portion of		Unrealized
Classification	Type of transaction	Contract amount	contract amount	Fair value
gain (loss)
			over one year

	Exchange forward
	contracts
	Selling Canadian	4,458	-	82	82
	Dollar

Transactions other	Selling British Pound	969	-	(41)	(41)
Currency options
than market	Written call options
transactions	Euro	29,274	-

	[Premium]	[119]	[-]	22	97
	Purchased put options
	Euro	14,637	-
	[Premium]	[119]	[-]	153	34
	Total	-	-	-	171

- 66 -

(Millions of dollars)

			Portion of		Unrealized
Classification	Type of transaction	Contract amount	contract amount	Fair value
gain (loss)
			over one year

	Exchange forward
	contracts
	Selling Canadian	41	-	0	0
	Dollar

Transactions other	Selling British Pound	8	-	(0)	(0)
Currency options
than market
Written call options
transactions
Euro	271	-

	[Premium]	[1]	[-]	0	0
	Purchased put options
	Euro	135	-
	[Premium]	[1]	[-]	1	0
	Total	-	-	-	1

(Notes) 1. The fair value as of March 31, 2019 and 2020 is calculated based on price quoted by correspondent financial institutions.

2. Amounts presented in square parentheses [ ] above are option premiums.

- 67 -

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 are defined 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

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

Previous fiscal year (From April 1, 2018 to March 31, 2019)

Current fiscal year (From April 1, 2019 to March 31, 2020)

	(Millions of yen)	(Millions of yen)	(Millions of
	dollars)

Beginning balance of retirement benefit obligations	51,253	56,591	523
Current service costs	2,898	2,953	27
Interest cost	1,150	1,136	10
Actuarial gains and losses	1,217	4,530	41
Retirement benefits paid	(1,211)	(1,186)	(10)
Other	71	29	0
Foreign currency translation difference	1,210	(607)	(5)
Ending balance of retirement benefit obligations	56,591	63,448	587

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

Previous fiscal year (From April 1, 2018 to March 31, 2019)

Current fiscal year (From April 1, 2019 to March 31, 2020)

	(Millions of yen)	(Millions of yen)	(Millions of
	dollars)

Beginning balance of plan assets	42,774	48,779	451
Expected return on assets	1,703	1,892	17
Actuarial gains and losses	(761)	(2,182)	(20)
Contribution by the business operator	5,371	2,733	25
Retirement benefits paid	(1,089)	(1,119)	(10)
Other	-	29	0
Foreign currency translation difference	781	(437)	(4)
Ending balance of plan assets	48,779	49,696	460

Reconciliation between beginning balance and ending balance of retirement benefit liability under the plan in which a simple method is applied

Previous fiscal year (From April 1, 2018 to March 31, 2019)

Current fiscal year (From April 1, 2019 to March 31, 2020)

	(Millions of yen)	(Millions of yen)	(Millions of
	dollars)

Beginning balance of retirement benefit liability	199	200	1
Retirement benefit expenses	97	136	1
Retirement benefit payment	(10)	(9)	(0)
Contribution into plan	(61)	(37)	(0)
Other	(24)	-	-
Foreign currency translation difference	0	0	0
Ending balance of retirement benefit liability	200	290	2

- 68 -

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

	Previous fiscal year	Current fiscal year
	(As of March 31,
	(As of March 31, 2020)
	2019)

	(Millions of yen)	(Millions of yen)	(Millions of
	dollars)

Retirement benefit obligations for funded plans	43,377	50,649	468
Plan assets	(49,353)	(50,265)	(465)
	(5,976)	384	3
Retirement benefit obligations for unfunded plans	13,988	13,658	126
Net amounts of liabilities and assets recorded in	8,012	14,042	130
consolidated balance sheets

Retirement benefit liability	15,068	20,450	189
Retirement benefit asset	(7,056)	(6,407)	(59)
Net amounts of liabilities and assets recorded in	8,012	14,042	130
consolidated balance sheets

(Note) Includes those under the plan in which a simple method is applied.

Retirement benefit expenses and their breakdown

Previous fiscal year (From April 1, 2018 to March 31, 2019)

Current fiscal year (From April 1, 2019 to March 31, 2020)

(Millions of yen)	(Millions of yen)	(Millions of
dollars)

Current service costs Interest cost

Expected return on assets

Amortization of actuarial gains and losses treated as expenses

2,995	3,090	28
1,150	1,136	10
(1,703)	(1,892)	(17)
1,978	6,712	62

Other	228	118	1
Retirement benefit expenses for defined benefit plan	4,650	9,165	84

(Note) Retirement benefit expenses of consolidated subsidiaries applying a simple method are recorded in "Current service costs."

Plan assets

a. Main components of plan assets

The ratios of components to plan assets by major category are as follows.

	Previous fiscal year	Current fiscal year
	(As of March 31, 2019)	(As of March 31, 2020)
Stocks	26%	14%
Bonds	61	76
Other	13	10
Total	100%	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.

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

Previous fiscal year (From April 1, 2018 to March 31, 2019)

Current fiscal year (From April 1, 2019 to March 31, 2020)

Discount rate	0.3% to 3.8%	0.3% to 3.1%
Expected long-term return rate on plan assets	2.7% to 5.5%	2.0% to 4.0%
- 69	-

3. Defined contribution plans

The amount of contribution required for the defined contribution plans at certain consolidated subsidiaries was ¥2,080 million for the year ended March 31, 2019 and ¥2,343 million (USD 21 million) for the year ended March 31, 2020.

Income taxes

1. Significant components of deferred tax assets and liabilities

	Previous fiscal year	Current fiscal year
	(As of March 31, 2019)	(As of March 31, 2020)
Deferred tax assets
Research and development expenses	¥	30,993 million	¥ 33,622 million	USD 311 million
Revenue recognition for tax purposes		7,279	14,169	131
Unrealized intra-group profit and write-downs		13,940	13,873	128
on inventory

Accounts payable - other and accrued expenses		9,744	11,270	104
Retirement benefit liability		4,160	5,498	50
Excess depreciation of deferred assets		5,411	5,457	50
Other		12,322	15,179	140
Deferred tax assets subtotal		83,853	99,072	917
Valuation allowance		(1,027)	(831)	(7)
Total deferred tax assets		82,825	98,240	909
Deferred tax liabilities
Undistributed retained earnings of subsidiaries		(13,227)	(15,019)	(139)
and associates

Valuation difference on available-for-sale		(7,652)	(6,031)	(55)
securities

Other		(3,955)	(4,990)	(46)
Total deferred tax liabilities		(24,835)	(26,041)	(241)
Net deferred tax assets	¥	57,990 million	¥ 72,199 million	USD 668 million

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

	Previous fiscal year	Current fiscal year
	(As of March 31, 2019)	(As of March 31, 2020)
Statutory tax rate	30.5%	30.5%
(Reconciliations)
Special deduction concerning total amount of experimentation	(0.8)	(0.9)
and research expenses

Different tax rates applied to the consolidated subsidiaries

Foreign tax credit on retained earnings of the overseas consolidated subsidiaries

Effect of profit and loss of the associates accounted for using equity method

Other

Effective tax rate after tax effect accounting

(0.6)	(0.6)
0.6	0.5
(0.8)	(0.7)
(0.5)	(0.4)
28.4%	28.4%

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.

- 70 -

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 a single 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 evaluation of 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, 2018 to March 31, 2019) 1. Information about products and services

				(Millions of yen)
	Nintendo 3DS Platform	Nintendo Switch Platform	Other	Total

Sales to third parties	63,035	1,027,937	109,586	1,200,560

2. Information by geographic areas

Net sales

						(Millions of yen)
	Japan	The Americas	Europe	Other	Total

		from U.S.


	265,722	528,895	460,947	304,552	101,389	1,200,560

(Note)	Net sales are categorized by country or region based on the location of the	customer.

Property, plant and equipment

			(Millions of yen)
Japan	U.S.	Other	Total

58,884	21,885	780	81,550

(Note) Property, 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.

- 71 -

Current fiscal year (From April 1, 2019 to March 31, 2020) 1. Information about products and services

				(Millions of yen)
	Nintendo 3DS Platform	Nintendo Switch Platform	Other	Total

Sales to third parties	18,056	1,219,327	71,134	1,308,519

				(Millions of dollars)
	Nintendo 3DS Platform	Nintendo Switch Platform	Other	Total

Sales to third parties	167	11,290	658	12,115

2. Information by geographic areas

Net sales

						(Millions of yen)
	Japan	The Americas	Europe	Other	Total

		from U.S.


	301,187	565,023	487,332	326,613	115,694	1,308,519

						(Millions of dollars)
	Japan	The Americas	Europe	Other	Total

		from U.S.


	2,788	5,231	4,512	3,024	1,071	12,115

(Note)	Net sales are categorized by country or region based on the location of the	customer.

Property, plant and equipment

			(Millions of yen)
Japan	U.S.	Other	Total

59,067	20,836	2,963	82,866

			(Millions of dollars)
Japan	U.S.	Other	Total
546	192	27	767

(Note) Property, 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.

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. - 72 -

Information about related party 1. Related party transactions Not applicable.

2. Note about significant associates Not applicable.

Per share information

	Previous fiscal year	Current fiscal year
	(From April 1, 2018	(From April 1, 2019
	to March 31, 2019)	to March 31, 2020)
Net assets per share	¥ 11,833.91	¥12,933.51	USD 119.75

Profit per share	¥1,615.51	¥2,171.20	20.10

(Notes) 1. Diluted profit per share is omitted as no residual securities were outstanding as of March 31, 2019 and 2020.

2. The basis of calculation of profit per share is as follows:

	Previous fiscal year	Current fiscal year
	(From April 1, 2018	(From April 1, 2019
	to March 31, 2019)	to March 31, 2020)
Profit attributable to owners of parent	¥ 194,009 million	¥ 258,641 million	USD 2,394 million
Amount not attributable to common	-	-	-
shareholders

Profit attributable to owners of parent	¥194,009 million	¥ 258,641 million	USD 2,394 million
related to common shares

Average number of shares (common	¥120,091	¥119,124	-
shares)	thousand shares	thousand shares

Significant subsequent events

Not applicable.

Supporting schedules to the consolidated financial statements
Supplemental schedule of bonds Not applicable.

- 73 -

Supplemental schedule of borrowings

Classification	Beginning balance	Ending balance	Average	Payment due
interest rate (%)

Short-term loans payable	-	-	-	-
Long-term loans payable due within	-	-	-	-
one year

Lease obligations due within one year	¥20 million	¥553 million	-	-
[USD 0 million]	[USD 5 million]

Long-term loans payable due after one	-	-	-	-
year

Lease obligations due after one year	¥36 million	¥1,608 million	-	April 2021
[USD 0 million]	[USD 14 million]	- February 2030

Other interest-bearing liabilities	-	-	-	-
Total	¥56 million	¥2,161 million	-	-
[USD 0 million]	[USD 20 million]

(Note) 1. The average interest rates of lease obligations are omitted as the interest equivalents are allocated to each fiscal year by the straight-line and interest methods.

2. With respect to lease obligations due after one year, the scheduled annual repayment amount within five years from the consolidated account closing date is as follows.

	More than one year	More than two years	More than three years	More than four years
	but no more than two	but no more than	but no more than four	but no more than five
	years	three years	years	years
	(Millions of yen)	(Millions of yen)	(Millions of yen)	(Millions of yen)
Lease obligations	447	313	248	261


	More than one year	More than two years	More than three years	More than four years
	but no more than two	but no more than	but no more than four	but no more than five
	years	three years	years	years
	(Millions of dollars)	(Millions of dollars)	(Millions of dollars)	(Millions of dollars)
Lease obligations	4	2	2	2

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, 2020 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, 2020.

Other

Quarterly information of the fiscal year ended March 31, 2020

					(Millions of yen)
(Cumulative period)	Three months	Six months	Nine months	Fiscal year
Net sales		172,111	443,967	1,022,668	1,308,519
Profit before income taxes		22,301	85,231	274,725	361,273
Profit attributable to owners of	16,604	62,018	196,389	258,641
parent

Profit per share	(Yen)	139.38	520.62	1,648.61	2,171.20
					(Millions of dollars)
(Cumulative period)	Three months	Six months	Nine months	Fiscal year
Net sales		1,593	4,110	9,469	12,115
Profit before income taxes		206	789	2,543	3,345
Profit attributable to owners of	153	574	1,818	2,394
parent

Profit per share	(Dollars)	1.29	4.82	15.26	20.1

- 74 -

				(Yen)
(Accounting period)	First quarter	Second quarter	Third quarter	Fourth quarter
Profit per share	139.38	381.23	1,128.00	522.58
				(Dollars)
(Accounting period)	First quarter	Second quarter	Third quarter	Fourth quarter
Profit per share	1.29	3.52	10.44	4.83

- 75 -

Corporate Information

Common Shares

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, 2020 was held on June 26, 2020 at Nintendo Co., Ltd. in Kyoto, Japan.

Independent Auditor

PricewaterhouseCoopers Kyoto

Kyoto, Japan

Contact Information

Investor Relations	Corporate Communications
Investor Relations Group	Public Relations Group
General Affairs Department	General Affairs Department
Nintendo Co., Ltd.	Nintendo Co., Ltd.
11-1Hokotate-cho, Kamitoba, Minami-ku,	11-1Hokotate-cho, Kamitoba, Minami-ku,
Kyoto 601-8501, Japan	Kyoto 601-8501, Japan
Tel: +81-75-662-9600	Tel: +81-75-662-9600
E-mail: IR@nintendo.co.jp	Strategic 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.

Investor Relations Information

(includes Management Policy, IR Events, Financial Data and Stock Information) https://www.nintendo.co.jp/ir/en/index.html

Company History

https://www.nintendo.co.jp/corporate/en/history/index.html

CSR Report

https://www.nintendo.co.jp/csr/en/index.html

- 76 -

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Nintendo Co. Ltd. published this content on 20 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 July 2020 10:05:02 UTC

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