Nintendo reported fiscal first-quarter results on Thursday that exceeded analyst expectations for both revenue and profit, bucking concerns over declining console hardware sales. The company maintained its full-year net sales guidance at 2.05 trillion yen, unchanged from forecasts announced in May for the fiscal year ending March 2027. Shares of the gaming company rose 2.87% in advance of the earnings announcement.
Switch 2 hardware sales declined significantly, dropping 34.4% year-over-year to 3.82 million units during the quarter, while sales of the original Nintendo Switch fell 31.8% to 0.66 million units. Despite the hardware slowdown, the company stated that consumers continued to purchase the Switch 2 platform, supported by releases of new games and other factors. Nintendo also noted that pricing increases implemented in Japan on May 25 and scheduled for the United States effective September 1 had not deterred Japanese market demand, with hardware sell-through remaining solid.
The company’s financial results were bolstered by strong software sales. Tomodachi Life: Living the Dream led performance with 7.94 million units sold, while Pokémon Pokopia sold 1.27 million units. Nintendo emphasized that releasing new titles at regular intervals is essential to expanding the Switch 2’s installed base and attracting a broader consumer audience.
Manufacturing pressures impacted profitability, with Nintendo factoring nearly 100 billion yen in cost-of-sales impacts from elevated memory chip prices and tariffs. The company attributed rising memory costs to strong demand for artificial intelligence applications. In separate developments, The Super Mario Galaxy Movie generated more than $1 billion in global box office revenue since its worldwide release on April 1, making it the second highest-grossing video game-based film of all time.
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