The company saw a 19% increase in net profit in the quarter ending June.
Nintendo said on Friday its quarterly revenue for the period ending June 30 had doubled year-on-year due to the sale of Switch 2 gaming consoles. The consoles became the most successful gaming hardware sold ever by a firm after launch.
The company sold 3.5 million Switch 2 consoles in the first four days after launch and 5.8 million by the end of June.
Nintendo credits Switch 2 for surge in revenue
The Japanese company also reported a 19% increase in net profit in the quarter. Its profit growth came due to a 572 billion yen (132%) increase in sales in Q2. Its operating profit for the quarter totaled 56.9 billion yen, above LSEG’s estimates of 53.46 billion yen.
Sales from the institution’s video game platform surged by 142.5%, to 555.5 billion. The firm said the Switch 2 consoles contributed much to its growth in the last quarter compared to its predecessor.
Nintendo’s property-related business, including movies and entertainment based on its original games, recorded a 4.4% drop in sales. The firm said the drop was due to a decrease in revenue from The Super Mario Bros movie.
Nintendo estimates an increase in revenue and operating profit for the year ending March 2026, to 1.9 trillion yen and 320 billion yen, respectively. The Kyoto-based firm believes the Switch 2 consoles will sell 15 million units this year, despite the heightened U.S. levies. Nathan Naidu of Bloomberg Intelligence believes that the establishment could surpass its target of 15 million units since it has already sold 40% of the target.
“While there have been changes in the market environment since we announced our initial forecast for the fiscal year, such as the U.S. tariff measures, at this time there is no significant impact on our earnings forecast for this fiscal year.”
-Nintendo.
Morningstar’s researcher, Kazunori Ito, also believes that U.S. tariffs will not affect the firm’s financial prospects. He argued that the company will recoup losses in the long term by selling more games and increasing its overall gaming audience.
The corporation also noted that its gross profit margin decreased by 29.5 points to 32.3%. The firm said the drop was due to hardware sales becoming higher with the launch of Switch 2.
The console’s software sold 8.67 million units in Q1. The firm said it was because many consumers purchased the hardware bundled with Mario Kart World.
The firm also acknowledged that there has been a scarcity of Switch 2 consoles in some countries. The Japanese company plans to boost its production and supply systems to cater to the demand for the hardware.
The firm also noted that demand for the Nintendo Switch console remained after the launch of the new console in June. He revealed that despite new games from the Pokémon, Metroid, and Kirby franchises debuting later this year, the gaming community is asking for even more titles for the Switch 2 consoles.
Nintendo Switch sees drop in sales
The Switch 2 predecessor has sold 153 million units since its 2017 release, its success mainly driven by the pandemic boom in gaming. The gaming company continues to show steady sales despite having a 53.5% drop in sales for the Nintendo Switch console.
The Nintendo Switch console is also among the top three gaming consoles, following PlayStation 2 and Nintendo DS. The institution said that the console needs to sell fewer than a million units to surpass sales from the Nintendo DS, with the target being to surpass Sony’s PS2 console.
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