Nintendo released fiscal first-quarter results on Thursday, surpassing analyst expectations for both revenue and net income despite headwinds in console hardware sales. The company’s stock rose 2.87% ahead of the earnings announcement.
Switch 2 hardware sales contracted 34.4% year-over-year to 3.82 million units during the quarter ending June 30, while original Nintendo Switch sales declined 31.8% to 0.66 million units. Despite the hardware softness, the company reported that consumer adoption of the Switch 2 continued, buoyed by the release of new software titles and other factors. Nintendo attributed part of the sales pressure to approximately 100 billion yen in additional costs from elevated memory component prices and tariffs, reflecting broader semiconductor market dynamics linked to artificial intelligence demand.
Software performance provided a bright spot, with Tomodachi Life: Living the Dream selling 7.94 million units and Pokémon Pokopia reaching 1.27 million units. Management emphasized that maintaining a consistent cadence of new game releases remains essential to grow the Switch 2’s installed base and broaden consumer appeal across different demographics.
Nintendo reaffirmed its full-year guidance through March 2027, maintaining net sales expectations at 2.05 trillion yen. The company announced price increases in multiple markets, including a 100 billion yen boost attributable to pricing adjustments in Japan beginning May 25 and a $50 increase in the United States effective September 1, raising the U.S. retail price to $499.99.
Beyond gaming hardware and software, Nintendo’s film division contributed meaningfully to results. The Super Mario Galaxy Movie accumulated more than $1 billion in global box office receipts since its April 1 worldwide release, ranking as the second highest-grossing video game-based film ever.
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