Nintendo Reports Sharp Decline in Switch Sales and Profit

Japan’s Nintendo reported that sales of its aging Switch console nearly halved in the April-June first quarter, resulting in a significant profit slump that fell far short of estimates.

The company sold just 2.1 million Switch units, which is now in its eighth year, during the quarter. Despite this, Nintendo has maintained its full-year sales forecast of 13.5 million units.

Upcoming Announcements and Financial Impact:

Nintendo has indicated plans to announce a successor device within the current financial year. The company’s operating profit tumbled 71% to 54.5 billion yen ($365 million), more than a third below analysts’ estimates.

Mobile and IP Division Performance:

The mobile and intellectual property-related division also experienced a weak performance, with revenue sliding to 14.7 billion yen, down 54% from the same period a year earlier. The previous year’s profit had been bolstered by the victory of the “Super Mario Bros.” movie.

Upcoming Game Releases and Film Projects:

This year, Nintendo has announced a limited pipeline of titles, including upcoming games such as “The Legend of Zelda: Echoes of Wisdom” and “Mario & Luigi: Brothership.”

Additionally, a new “Super Mario” film is scheduled for release in April 2026, and the company has also announced a collaboration on a live-action movie adaptation of “The Legend of Zelda.”

Industry Challenges and Broader Impact:

The gaming industry is currently grappling with rising costs and weak pricing power. This week, Sony-owned developer Bungie announced it would cut almost a fifth of its workforce. Shares in Nintendo fell 2.3% in Tokyo ahead of the earnings announcement but are up 7.6% year to date.