Nintendo reported a 29 percent drop in fiscal second-quarter net profit as sales of the Switch 2 console slowed, falling to 73.5 billion yen ($465.3 million) for the period ending September 30. Despite the decline in hardware unit sales, the company maintained its annual financial forecasts for the year ending March 2027.
Switch 2 Sales Decline Compared to Last Year
Nintendo sold 2.67 million units of the Switch 2 during the quarter from July to September, a 41 percent decrease compared to the same period last year. For the first half of the fiscal year, Switch 2 unit sales reached 6.49 million, down 37.4 percent from the 10.36 million units shipped during the initial launch period a year earlier. Cumulative Switch 2 sales have now reached 26.35 million consoles worldwide. The original Nintendo Switch hardware added 1.27 million units in the same six-month window, marking a 32.7 percent year-on-year decline.
The company attributed the hardware slowdown to a combination of factors, including price increases implemented in the U.S., Canada, and Japan. Effective September 1, 2026, Nintendo of America increased the suggested retail price of the Switch 2 from $449.99 to $499.99. Despite the drop in hardware shipments, Shuntaro Furukawa noted during an online news conference that the console is still penetrating the market at a pace that remains within company expectations.
Software Sales Rise Despite Falling Hardware Shipments
While hardware shipments declined, software sales provided a counterbalance. Nintendo reported that Switch 2 software sales rose 18.8 percent to 24.49 million units during the first half of the fiscal year. Total software unit sales across all platforms reached 65.73 million, an increase of 6.8 percent. Key titles contributing to this demand included Tomodachi Life: Living the Dream,
which sold 8.81 million units, and Rhythm Heaven Groove,
which reached 2.89 million units. Additionally, Splatoon Raiders,
launched in July, sold 2.42 million units, while Fire Emblem: Fortune's Weave
moved 1.34 million units following its September release.
Operating profit for the six-month period climbed 49.1 percent to 216.5 billion yen. According to Nintendo, this growth was driven by a higher proportion of software in the sales mix and a one-time refund of U.S. tariffs previously recorded as costs. Digital sales also saw significant growth, increasing 60.5 percent to 249.6 billion yen, with digital purchases accounting for 60.7 percent of total software sales, up from 54.5 percent in the prior year.
Analysts Worry About Software Lineup and Investor Expectations
Analysts have expressed concern regarding the lack of marquee software titles to drive console adoption. Serkan Toto, CEO of Kantan Games, told CNBC that the company’s current software lineup has not fully met investor expectations.
Nintendo’s only real blockbuster this fiscal year is the Ocarina Of Time remake. It’s not enough to make investors happy, especially after the device is now as expensive as it is,
Serkan Toto, CEO of Kantan Games
The company is looking to its long-running intellectual property to maintain engagement. The Legend of Zelda: Ocarina of Time,
released on November 5, has already garnered critical acclaim with a score of 96 out of 100 on the aggregator site Metacritic. Nintendo also noted that revenue from intellectual property-related businesses climbed 87.9 percent to 62.7 billion yen, supported by the performance of The Super Mario Galaxy Movie.
Full-Year Financial Forecasts
Nintendo maintained its full-year guidance, expecting revenue of 2.05 trillion yen for the fiscal year ending March 2027. The company remains committed to its target of shipping 16.5 million Switch 2 consoles, even as it anticipates a 100 billion yen impact from rising component costs and tariffs. Net profit for the full year is projected at 310 billion yen, a 26.9 percent decline from the previous year, while operating profit is forecast to rise 2.7 percent to 370 billion yen.
| Category | Result (Six Months to Sept. 2026) | Year-on-Year Change |
|---|---|---|
| Revenue | 966 billion yen | -12.1% |
| Operating profit | 216.5 billion yen | +49.1% |
| Net profit | 220.9 billion yen | +11.0% |
| Switch 2 unit sales | 6.49 million units | -37.4% |
| Switch 2 software | 24.49 million units | +18.8% |
| Total software sales | 65.73 million units | +6.8% |
Following the November 5 release of Ocarina of Time,
the company will launch Pikmin 4 – Nintendo Switch 2 Edition + Dandori Academy
on November 12, Xenoblade Chronicles 3 – Nintendo Switch 2 Edition
on December 3, and Metroid Ravenous
on January 28, 2027.
Earlier coverage: Macronix to Exit ROM Business Used for Nintendo Switch Cartridges
