This year, Nintendo is feeling the strain as sales for its long-running Switch console decline more steeply than anticipated. Given the console's age, the company expected a drop in Switch sales, but figures over the last two quarters have come below projections. Between April and September, Nintendo sold 4.72 million units—far fewer than the 6.84 million units sold during the same period last year. Consequently, Nintendo has revised its full-year sales forecast for the console from 13.5 million units to 12.5 million, a significant cut of one million units.
Financial forecast adjusts amid lower console sales
This adjustment has also impacted Nintendo's overall revenue outlook. The company initially projected a sales target of 1.35 trillion yen but has now reduced it by 5.2% to 1.28 trillion yen (US$8.41 billion). Despite the downward revision in sales targets, Nintendo expects to maintain its net profit levels, signalling confidence that it can control costs and sustain its bottom line amid weaker hardware sales.
Nintendo managed to post strong financial results in the last fiscal year, which ended in March 2024. The success was driven mainly by the release of The Legend of Zelda: Tears of the Kingdom, a game that became an instant hit, and the success of The Super Mario Bros. Movie. These key releases helped boost revenue and engagement with the Switch console. However, Nintendo acknowledges that it had no similarly significant releases in the first half of this fiscal year, leading to a noticeable drop in hardware and software sales compared to the previous year.
Signs of life with new editions, but major updates await
Despite the decline, there have been a few bright spots. Nintendo saw a slight boost in Switch sales towards the end of the last quarter, attributed to special editions like the Switch Lite: Hyrule Edition, which launched alongside other bundled hardware and software options. These releases have offered some relief, though not enough to counterbalance the decline.
The Switch has had an impressive run. In its eighth year since its release, it has become Nintendo's second-best-selling console after the DS. However, as Nintendo shifts focus, the company is pinning its hopes on its upcoming next-generation console, widely referred to as the “Switch 2.” The new model is highly anticipated but won't be announced until early next year so that it won't influence sales figures until 2024.
Nintendo faces a transitional phase as it looks to close the chapter on the Switch while laying the groundwork for its future in the gaming market. With the release of a new console on the horizon, the company hopes to recapture the excitement and market presence that the original Switch generated upon its launch.
