● Covered by 4 sources · 5 reportsMedium impact4 neutral1 positive
Nintendo Exceeds Q1 Profit and Revenue Estimates Despite Switch 2 Sales Decline
Key points
- Q1 net profit was 147.4 billion yen, exceeding estimates.
- Revenue reached 517.8 billion yen, above expectations.
- Switch 2 console sales fell 34.4% to 3.82 million units.
- Strong game sales and a $300 million tariff refund contributed to profits.
- Nintendo maintained its full-year forecast for net sales at 2.05 trillion yen.
First-Quarter Financial Performance
Nintendo announced its fiscal first-quarter earnings, surpassing analysts' projections for both revenue and profit. For the quarter ending June 30, the company reported a net profit of 147.4 billion yen ($934 million), significantly higher than the estimated 78.30 billion yen. Revenue also exceeded expectations, reaching 517.8 billion yen ($3.28 billion) against a forecast of 444.96 billion yen.
Operating profits saw a substantial increase of 150.5%, rising to 142.5 billion yen ($902 million) from 56.9 billion yen in the same period last year. Despite these strong results, overall sales revenue for the company decreased by 10% compared to the previous year.
Switch Console Sales Decline
Sales of the Nintendo Switch 2 console experienced a notable decline, falling 34.4% year-over-year to 3.82 million units. Sales of the original Nintendo Switch also dropped by 31.8% to 0.66 million units. Despite the decrease in hardware sales, Nintendo stated that consumers continued to adopt the Switch 2, supported by new game releases and other factors.
The company maintained its forecast for Switch 2 sales at 16.5 million units for the fiscal year ending March 2027. This forecast is lower than the 19.86 million Switch 2 units sold in the previous year.
Impact of Game Sales and Tariff Refunds
The positive financial results were largely driven by robust game sales and a significant refund from US tariffs. Switch 2 software sales increased by 9.2% compared to the previous year, while software sales for the original Switch console rose by 38.6%. Titles like "Tomodachi Life: Living the Dream" shipped 7.96 million copies, and "Pokémon Pokopia" sold over 5 million units within four months of its launch, becoming the second-best-selling game on the Switch 2.
A $300 million refund from US tariffs, following a Supreme Court ruling that deemed certain Trump-era trade levies illegal, also contributed to Nintendo's profit surge. This refund amounted to approximately 60% of the total $165 billion collected from these tariffs.
Future Outlook and Challenges
Nintendo has maintained its full-year forecast for net sales at 2.05 trillion yen for the year ending March 2027. The company has factored in a nearly 100 billion yen impact from higher component prices, particularly for memory, and tariffs into its cost of sales.
An anticipated price hike for the Switch 2 in the US, from $450 to $500, is scheduled for September 1, 2026. This could potentially affect future sales. Nintendo's shares closed 2.87% higher ahead of its earnings release and saw a 7% increase after the "Pokémon Pokopia" sales milestone was announced.
✨ This summary was generated by AI from the outlets' reporting listed below. It is not independently verified and may contain errors — check the original sources. How BrevFeed works →
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How outlets covered it
'Pokémon Pokopia' has sold over 5 million units on the Nintendo Switch 2 console within four months of its launch, making it the second-best-selling game on the platform. This sales milestone led to a 7% increase in Nintendo's shares, as strong game sales can drive console shipments, which have recently faced headwinds.
Nintendo reported a 53.5% increase in profits for the three months to June, reaching ¥147.4bn, primarily driven by a refund of US tariffs imposed by the Trump administration. This profit surge occurred despite a 10% decline in overall sales revenue compared to the previous year.
Nintendo reported a 150.5% increase in first-quarter operating profits, reaching 142.5 billion yen ($902 million), largely due to strong game sales and a $300 million refund from US tariffs. The company is currently defending a lawsuit alleging it retained tariff refunds despite passing costs to consumers, similar to a case faced by Sony.
Nintendo's Switch 2 console sales dropped 34.4% to 3.82 million units in the recent quarter compared to the same period last year, though the company is not expressing concern. This decline occurs ahead of an anticipated price hike for the console in the US and despite strong game sales and tariff refunds boosting overall revenue.
Nintendo reported fiscal first-quarter earnings exceeding revenue and profit estimates, even as sales of its Switch 2 console declined by 34.4%. The company maintained its full-year forecast, citing strong game sales and price increases for the Switch 2 in some markets.