Nintendo beats first-quarter estimates despite Switch 2 sales slowdown

Nintendo reported fiscal first-quarter results that exceeded analysts' expectations, posting stronger-than-expected revenue and profit despite a slowdown in Switch 2 console sales.

For the quarter ended June 30, the Japanese gaming giant reported revenue of 517.8 billion yen (approximately $3.28 billion), well above the 444.96 billion yen expected by analysts. Net profit came in at 147.4 billion yen, nearly double the market forecast of 78.3 billion yen.

Ahead of the earnings release, Nintendo shares closed 2.87% higher.

On the operational front, Nintendo Switch 2 hardware sales fell 34.4% year over year to 3.82 million units. Sales of the original Nintendo Switch also declined 31.8%, totaling 660,000 units during the quarter.

The company said demand for the Switch 2 remains solid, supported by the launch of new game titles and continued consumer interest. Nintendo added that maintaining a steady pipeline of new releases will be key to expanding the console's installed base and attracting a broader audience.

Among the best-performing titles, Tomodachi Life: Living the Dream sold 7.94 million copies, while Pokémon Pokopia reached 1.27 million units sold.

Nintendo also reaffirmed its full-year guidance, maintaining its forecast for net sales of 2.05 trillion yen for the fiscal year ending March 2027.

The company said it has already factored in an approximately 100 billion yen impact on its cost of sales from higher component prices, particularly memory chips, as well as tariffs. The Switch 2 relies on memory components whose prices have surged amid strong demand driven by artificial intelligence technologies.

In Japan, where Nintendo raised the Switch 2 price on May 25, hardware sell-through has remained resilient. In the United States, the company previously announced a $50 price increase, effective September 1, raising the console's retail price from $449.99 to $499.99.

Beyond its gaming business, Nintendo highlighted the success of The Super Mario Galaxy Movie, which has generated more than $1 billion in worldwide box office revenue since its April 1 release, making it the second highest-grossing video game adaptation of all time.