Nintendo reported its fiscal first-quarter earnings, surpassing analysts' expectations for both revenue and net profit, despite a significant drop in Switch 2 console sales. For the quarter ended June 30, Nintendo posted revenue of 517.8 billion Japanese yen ($3.28 billion), exceeding the LSEG median estimate of 444.96 billion yen, and net profit of 147.4 billion yen, well above the expected 78.30 billion yen [1]. Shares of Nintendo closed 2.87% higher ahead of the earnings release [1].
Switch 2 hardware sales fell 34.4% year-over-year to 3.82 million units, while the original Nintendo Switch saw a 31.8% decline to 0.66 million units. Despite the lower hardware sales, Nintendo noted continued consumer adoption of the Switch 2, supported by new game releases and other factors [1]. The company maintained its full-year net sales forecast at 2.05 trillion yen for the year ending March 2027, as previously announced in May [1].
Nintendo attributed nearly a 100 billion yen increase in its cost of sales to higher component prices, particularly for memory chips, and tariffs. The Switch 2, launched last June, uses memory chips that have seen price surges due to strong AI-related demand [1]. Game sales were bolstered by the strong performance of 'Tomodachi Life: Living the Dream,' which sold 7.94 million units, and 'Pokémon Pokopia,' which sold 1.27 million units [1].
The company emphasized the importance of releasing new titles at regular intervals to expand the Switch 2's installed base and broaden its appeal. In Japan, where Nintendo raised Switch 2 prices on May 25, hardware sell-through remained solid. Nintendo also announced a $50 price increase for the Switch 2 in the United States, effective September 1, raising the retail price to $499.99 [1]. Beyond gaming, 'The Super Mario Galaxy Movie' has generated over $1 billion in global box office revenue since its April 1 release, making it the second highest-grossing video game-based film ever [1].
CONCLUSION
Nintendo delivered a strong fiscal first-quarter performance, beating profit and revenue estimates despite a notable decline in Switch 2 hardware sales. The company's results were supported by robust game sales and successful media ventures, while it maintained its full-year outlook. Market sentiment was positive, as reflected in the share price increase ahead of the earnings announcement.