Nintendo's hardware sales forecast takes another hit, as Switch console and game sales fell short of projections.
For the first nine months of the fiscal year, Nintendo's dedicated video game console business saw a 31.7% year-over-year drop in revenue, reaching 895.5 billion yen (approximately $5.7 billion). This significant decline stems from reduced sales of both the Nintendo Switch hardware and its software titles.
Mobile and IP-related income also experienced a downturn, decreasing by 33.9% year-over-year to 49.7 billion yen (approximately $320 million). This is largely attributed to a challenging comparison with the exceptionally successful 2023 release of The Super Mario Bros. Movie.
Consequently, gross profit decreased by 27.3% year-over-year to 565.5 billion yen (approximately $3.6 billion).
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Nintendo has again lowered its financial forecast for the fiscal year ending March 2025, marking the second consecutive downward revision. The company anticipates even lower Nintendo Switch hardware sales than previously projected, reducing its forecast by 1.5 million units to 11 million, and software sales by 10 million units to 150 million.
While sales declines were expected for the eight-year-old Switch, the magnitude surpasses Nintendo's initial predictions. Nevertheless, the Switch has achieved remarkable success, surpassing 150 million units sold. While overtaking the PlayStation 2's 160 million sales to become the best-selling console of all time might be a stretch, surpassing the Nintendo DS's 154 million sales remains a possibility.
Nintendo characterized Switch and software sales in the third quarter (ending December 31, 2024) as "stable, considering the platform's eighth year."
Overall Switch family system sales dropped 30.6% year-over-year to 9.54 million units. Software sales declined by 24.4% year-over-year to 123.98 million units. However, Nintendo highlighted strong sales of new titles: The Legend of Zelda: Echoes of Wisdom (3.91 million), Super Mario Party Jamboree (6.17 million), Mario Kart 8 Deluxe (5.38 million), and Nintendo Switch Sports (2.63 million) during the quarter. Mario & Luigi: Brothership reached 1.4 million units sold.
Super Mario Party Jamboree stands out as a significant success. In its first 11 weeks (following its October 17, 2024 release), it outperformed previous Mario Party titles on the Switch.
Crucially, for Nintendo's upcoming Switch 2 launch, the active player base remains robust, with 129 million annual playing users in 2024. This indicates continued engagement despite the console's age.
Nintendo acknowledged the year-over-year decline in Switch unit sales but emphasized its continued appeal, noting that holiday season sales in some weeks even exceeded those of the previous year.
AnswerSee ResultsGiven the financial report, investors will eagerly anticipate the Switch 2's release. Nintendo highlighted upcoming titles for the original Switch: Xenoblade Chronicles X: Definitive Edition (March 20 release), and Pokémon Legends: Z-A and Metroid Prime 4: Beyond (scheduled for 2025).
The Switch 2 was mentioned, with Nintendo reiterating its planned 2025 release and referencing the January 16th hardware reveal video. A dedicated Switch 2 Direct is planned for April 2nd, along with hands-on events globally.
