Nintendo: Switch 2 sales fall 41%, but profit grows on games and tariff refunds

Falling sales, rising profits

On Thursday, Nintendo published the results of the first half of fiscal year 2026–27, and the picture turned out to be mixed. Sales of the Switch 2 console in July–September fell 41.2% year-on-year — to 2.67 million units, compared with 4.54 million a year earlier and 3.82 million in the previous quarter, that is, down 30.1% over three months. For the half-year, Switch 2 sales totaled 6.49 million consoles (down 37.4%), while the original Switch sold 1.27 million (down 32.7%). This was reported by the Anadolu agency, citing the company's financial statements.

Quarterly profit fell short of expectations

AFP adds the quarterly dynamics to the picture: net profit for July–September fell 29% to 73.5 billion yen ($465.3 million), missing the Bloomberg analyst consensus forecast of 82.2 billion yen. At the same time, for the first half of the year, net profit rose 11% — to approximately $1.4 billion — while operating profit grew 49.1% to 216.5 billion yen ($1.37 billion). Revenue, however, declined 12.1% to about $6.12 billion. Nintendo attributes the growth in operating profit to steady game sales, which accounted for a larger share of revenue, as well as to the refund of U.S. customs duties that had previously been recorded as expenses in the first quarter.

Software pulls upward

Software figures contrast with the hardware: sales of games for the Switch 2 grew 18.8% over the half-year to 24.49 million copies, and for the original Switch by 6.8% to 65.73 million. The company said that new releases are supporting the spread of the Switch 2 and that it plans to expand the console's user base through sales of existing games and the release of new ones, relying on the large base of original Switch owners. AFP notes that some analysts linked the console's sluggish sales to the absence of a blockbuster capable of boosting its adoption; hopes are pinned on the remake of The Legend of Zelda: Ocarina of Time, released on Thursday as part of the series' 40th anniversary, which had scored 96 out of 100 on Metacritic on the eve of its release.

Rising memory prices and forecasts

Nintendo kept its annual forecasts: revenue of about $12.98 billion, operating profit of $2.34 billion, net profit of $1.96 billion (310 billion yen), and a target of 16.5 million Switch 2 units sold by the end of the fiscal year in March 2027. The forecast already includes about $633 million in costs related to rising component prices — primarily memory — and tariff measures. As AFP writes, the company raised the price of the Switch 2 this year amid a surge in memory chip costs driven by the boom around artificial intelligence. Against Nintendo's weak results, Sony's report stands in contrast: the same day, it raised its annual profit forecast to 1.33 trillion yen thanks to games, music and film, including the success of the movie «Spider-Man: Brand New Day».